01—Abstract
Summary
Summary of the 10-Q filed April 23, 2019. Cited figures are marked; the original filing is the authoritative source.
Procter & Gamble Co. (PG) reported a solid third quarter for fiscal year 2019, with net sales increasing by 1% to $16.5 billiona and net earnings attributable to Procter & Gamble rising by 9% to $2.7 billion ($1.04 per diluted share).
For the nine-month period, net sales grew 1% to $50.6 billionb, and net earnings attributable to Procter & Gamble increased by 16% to $9.1 billion ($3.48 per diluted share). The company demonstrated strong organic sales growth of 5% in the quarter and 4% year-to-date, driven by volume increases across several key segments, including Health Care, Fabric & Home Care, and Beauty.
Management highlighted effective cost management and productivity savings as key contributors to the improved profitability. The company also continued its commitment to returning capital to shareholders through dividends and share repurchases, with approximately $12.9 millionc shares repurchased in the quarter.
02—Key points
Key Highlights
- Net sales for the third quarter increased 1% to $16.5 billion, with organic sales up 5%.
- Diluted EPS for the quarter was $1.04, a 9% increase year-over-year.
- For the nine-month period, net sales were $50.6 billion, up 1%, with organic sales up 4%.
- Net earnings attributable to P&G increased 16% year-to-date to $9.1 billion.
- Health Care, Fabric & Home Care, and Beauty segments showed positive net sales growth, with Health Care particularly strong with a 9% increase in net sales for the quarter.
- The company generated $11.1 billion in cash from operating activities for the nine-month period, demonstrating strong operational cash flow.
- Share repurchases continued, with approximately 12.9 million shares bought back in the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2019, Procter & Gamble Co kept $0.17.
- Revenue$16.46B100.0%
- Cost of revenue−$8.43B51.2%
- Gross profit$8.04B48.8%
- Operating costs−$4.81B29.2%
- Operating income$3.23B19.6%
- Interest, other & tax−$484.0M2.9%
- Net income$2.75B16.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2019filed April 23, 2019Financial Statements
Q3 FY2019 against Q3 FY2018
| Line item | Q3 FY2019Q3 FY2018 | Change |
|---|---|---|
| Revenue | $16.46B$16.28B | +1.1% |
| Cost of Revenue | $8.43B$8.38B | +0.5% |
| Gross Profit | $8.04B$7.90B | +1.7% |
| SG&A Expenses | $4.81B$4.69B | +2.5% |
| Operating Income | $3.23B$3.21B | +0.6% |
| Interest Expense | $131.00M$133.00M | −1.5% |
| Net Income | $2.75B$2.51B | +9.3% |
| EPS (Basic) | $1.07$0.97 | +10.3% |
| EPS (Diluted) | $1.04$0.95 | +9.5% |
| Shares Outstanding (Basic) | 2.51B2.52B | −0.5% |
| Shares Outstanding (Diluted) | 2.64B2.65B | −0.3% |
05—Questions
Frequently Asked Questions
What was the overall financial performance for the quarter and year-to-date?
For the third quarter of fiscal year 2019, Procter & Gamble reported a 1% increase in net sales to $16.5 billion and a 9% increase in net earnings attributable to P&G to $2.7 billion, or $1.04 per diluted share. Year-to-date, net sales increased 1% to $50.6 billion, and net earnings attributable to P&G rose 16% to $9.1 billion, or $3.48 per diluted share.
Which business segments performed particularly well?
The Health Care segment showed robust performance with a 9% increase in net sales for the quarter, driven by volume growth and a 5% organic sales increase. Fabric & Home Care also saw a 2% increase in net sales, supported by volume growth and organic sales growth of 7%. The Beauty segment reported a 4% increase in net sales, with organic sales up 9%.
How did the company manage its costs and expenses?
Procter & Gamble emphasized productivity savings and cost management. Gross margin improved in the quarter due to manufacturing cost savings projects and positive pricing impacts, partially offset by higher commodity costs and unfavorable foreign exchange. SG&A as a percentage of net sales decreased year-to-date due to reductions in marketing spending and productivity savings, although overhead costs and other operating costs saw some increases.
What is the company's strategy regarding capital allocation?
The company continues to return capital to shareholders through dividends and share repurchases. For the quarter, P&G repurchased approximately 12.9 million shares. Year-to-date, the company generated strong operating cash flow of $11.1 billion, supporting these capital return initiatives.
06—Continue