01—Abstract
Summary
Summary of the 8-K filed September 5, 2001. Cited figures are marked; the original filing is the authoritative source.
Procter & Gamble reaffirmed its prior guidance in an 8-K filed September 5, 2001, stating it remains comfortable with its outlook for the September 2001 quarter and for Fiscal Year 2002.
The company had previously estimated that July-September core earnings per share would rise by low-to-mid single digits versus the prior year's quarter. For Fiscal 2002, it expected core EPS growth at or above the prior year's rate, but not yet reaching its double-digit earnings growth target. The filing is a brief reaffirmation with no new quantitative targets.
The guidance explicitly excludes the pending Clairol acquisition, a potential transaction with The Coca-Cola Company, and the planned divestitures of the Crisco and Jif brands. Investors should therefore read the outlook as covering the existing business only, with those transactions treated as separate, uncertain events. The guidance does include an accounting benefit from the elimination of goodwill amortization, which P&G estimated at about $0.03a per share for the September quarter and a $0.13 to $0.15 per share positive impact on Fiscal 2001 results and Fiscal 2002 estimates.
The statement carries standard forward-looking cautions covering business unit growth, restructuring execution, competition, developing-market growth in China, Korea, Latin America and Central and Eastern Europe, and regulatory clearances for the Coca-Cola and Clairol transactions. The main takeaway is that management sought to reassure investors that its near-term outlook had not changed, while signaling that its double-digit growth target remained out of reach for the time being.
02—Key points
Key Highlights
- P&G reaffirmed guidance for the July-September 2001 quarter, which still calls for core EPS up low-to-mid single digits year over year.
- Fiscal 2002 core EPS growth is expected to equal or exceed Fiscal 2001's growth rate, but not yet the company's double-digit earnings growth target.
- Guidance excludes the pending Clairol acquisition, a potential Coca-Cola transaction, and the divestitures of the Crisco and Jif brands.
- Elimination of goodwill amortization is expected to add about $0.03 per share to the September quarter and its base period comparison.
- Goodwill accounting change should boost Fiscal 2001 results and Fiscal 2002 estimates by roughly $0.13 to $0.15 per share.
- The filing contains no new quantitative targets; it is a reaffirmation of guidance first given August 7, 2001.
- Forward-looking risks include restructuring execution, competitive intensity, developing-market growth, and regulatory clearances for pending transactions.
03—Questions
Frequently Asked Questions
Did P&G change its earnings guidance in this September 2001 filing?
No. P&G stated it remained comfortable with the guidance it gave on August 7, 2001, for the September quarter and Fiscal Year 2002. No new numbers were introduced.
What EPS growth does P&G expect for the September 2001 quarter?
Core earnings per share are expected to be up low-to-mid single digits compared with the prior year's September quarter.
Does the guidance include the Clairol acquisition or the Coca-Cola transaction?
No. The guidance excludes any impact from the pending Clairol acquisition, a potential transaction with The Coca-Cola Company, and the divestitures of the Crisco and Jif brands.
How will the goodwill accounting change affect P&G's earnings?
Eliminating goodwill amortization is expected to add about $0.03 per share to the September quarter and its base period comparison, and to add roughly $0.13 to $0.15 per share to Fiscal 2001 results and Fiscal 2002 estimates.
Has P&G reached its double-digit earnings growth target?
Not yet. For Fiscal 2002, the company expects core EPS growth at or above the prior year's rate, but this is still below its double-digit earnings growth target.
04—Continue