Summary
Procter & Gamble's (PG) first quarter of fiscal year 2015 (ending September 29, 2014) showed flat net sales of $20.8 billion, with organic sales up 2%. While unit volume remained stable, this was driven by growth in Health Care and Fabric/Home Care, offset by declines in Beauty/Personal Care and Grooming. The company experienced a significant decline in net earnings attributable to PG, down 34% to $2.0 billion. This was largely impacted by a substantial non-cash goodwill and intangible asset impairment charge of $932 million related to the Batteries business, and a $104 million charge from balance sheet remeasurements in Venezuela. Core net earnings per share, which excludes these charges, showed a modest increase of 2% to $1.07, indicating underlying operational resilience. Financially, the company generated strong operating cash flow of $3.6 billion and free cash flow of $2.8 billion, with an adjusted free cash flow productivity of 96%. The company continued its portfolio optimization efforts, completing the divestiture of its Pet Care business and announcing plans to exit the Batteries business. These strategic moves are aimed at focusing on core strengths and improving long-term growth and profitability. Investors should note the significant impact of the impairment charges and foreign currency impacts on reported earnings, while observing the positive trends in core earnings and cash flow generation.
Financial Highlights
53 data points| Revenue | $18.77B |
| Cost of Revenue | $9.73B |
| Gross Profit | $9.04B |
| SG&A Expenses | $5.40B |
| Operating Income | $3.63B |
| Interest Expense | $170.00M |
| Net Income | $1.99B |
| EPS (Basic) | $0.71 |
| EPS (Diluted) | $0.69 |
| Shares Outstanding (Basic) | 2.71B |
| Shares Outstanding (Diluted) | 2.89B |
Key Highlights
- 1Net sales remained flat at $20.8 billion, with organic sales growing 2% driven by pricing and favorable product mix.
- 2Net earnings attributable to Procter & Gamble decreased significantly by 34% to $2.0 billion, primarily due to a $932 million non-cash impairment charge related to the Batteries business and $104 million in Venezuela remeasurement charges.
- 3Core net earnings per share (excluding special charges) increased by 2% to $1.07, demonstrating underlying operational strength.
- 4Operating cash flow was robust at $3.6 billion, and free cash flow was $2.8 billion, with an adjusted free cash flow productivity of 96%.
- 5The company completed the sale of its Pet Care business and is pursuing an exit from its Batteries business as part of its portfolio optimization strategy.
- 6Divisional performance was mixed, with Health Care and Baby/Feminine/Family Care showing sales growth, while Fabric Care/Home Care and Beauty/Hair/Personal Care experienced slight declines.