Procter & Gamble on Wednesday reported quarterly earnings and revenue that topped Wall Street’s expectations as price hikes drove higher razor and laundry detergent sales.
However, inflation is still putting pressure on the company’s profits. Despite raising its fiscal 2022 revenue growth outlook, the consumer goods giant said it expects its core earnings per share for the year to be on the lower end of its prior range.
Shares of the company rose roughly 1% in premarket trading.
Here’s what the company reported compared to what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $ 1.33 adjusted vs. $ 1.29 expected
- Revenue: $ 19.38 billion vs. $ 18.73 billion expected
P&G reported fiscal third-quarter net income of $ 3.36 billion, or $ 1.33 per share, up from $ 3.27 billion, or $ 1.26 per share, a year earlier.
Higher commodity and freight costs weighed on the company’s margins, but increased prices and productivity savings helped offset some of the drag to its profits. The company’s gross margin fell 4 percentage points compared with the year-ago period, although its operating margin dropped just 0.1 percentage point in the quarter.
Excluding items, the company earned $ 1.33 per share, topping the $ 1.29 per share expected by analysts surveyed by Refinitiv.
Net sales rose 7% to $ 19.38 billion, beating expectations of $ 18.73 billion.
For fiscal 2022, P&G raised its revenue growth forecast to a range of 4% to 5%, up from its prior outlook of 3% to 4%. The company likewise hiked its forecast for organic sales growth to a range of 6% to 7% from a range of 4% to 5%.
The company reiterated its core earnings per share forecast but said it’s expecting the lower end of its predicted range of 3% to 6% growth, citing inflation and currency headwinds. P&G is predicting a $ 2.5 billion hit from higher commodity costs, $ 400 million from increased freight costs and $ 300 million from foreign currency headwinds. It marks the third consecutive quarter that the company has raised its inflation forecast.
Read the full earnings report here.