Summary
Procter & Gamble's (PG) Q1 FY16 results, filed on October 23, 2015, reflect a challenging revenue environment with a 12% year-over-year net sales decrease to $16.5 billion, primarily driven by a 5% decline in unit volume and a significant 9% negative impact from foreign exchange. Despite the top-line pressure, the company managed to increase net earnings from continuing operations by 2% to $2.8 billion, largely due to improved operating margins driven by cost savings and pricing actions. A substantial reduction in losses from discontinued operations, notably a $582 million decrease in impairment charges related to the Batteries business, significantly boosted overall net earnings attributable to P&G by 31% to $2.6 billion, with diluted EPS rising to $0.91.
Financial Highlights
53 data points| Revenue | $16.53B |
| Cost of Revenue | $8.15B |
| Gross Profit | $8.38B |
| SG&A Expenses | $4.61B |
| Operating Income | $3.77B |
| Interest Expense | $140.00M |
| Net Income | $2.60B |
| EPS (Basic) | $0.93 |
| EPS (Diluted) | $0.91 |
| Shares Outstanding (Basic) | 2.72B |
| Shares Outstanding (Diluted) | 2.87B |
Key Highlights
- 1Net sales declined 12% to $16.5 billion, with a 5% decrease in unit volume and a 9% headwind from unfavorable foreign exchange.
- 2Net earnings from continuing operations increased 2% to $2.8 billion, driven by margin expansion from cost savings and pricing.
- 3Diluted EPS from continuing operations grew 3% to $0.96.
- 4Significant reduction in losses from discontinued operations, primarily due to lower impairment charges for the Batteries business, led to a 31% increase in net earnings attributable to P&G to $2.6 billion.
- 5The company is actively divesting non-core assets, with agreements in place for the Beauty Brands (merging with Coty) and the Batteries business (to Berkshire Hathaway).
- 6Free cash flow generation remained strong at $3.0 billion for the quarter, with adjusted free cash flow productivity at 101%.