The Procter & Gamble Co.’s lower second-quarter earnings came in ahead of Wall Street estimates as its Beauty unit logged higher profits despite a decline in revenues.
In the three months ended Dec. 31, the Cincinnati-based consumer products giant recorded net income of $3.43 billion, or $1.18 a diluted share, 15.5 percent below the $4.06 billion, or $1.39, recorded in the year-ago period. Adjusted EPS, eliminating the effects of restructuring efforts, was $1.21, 1 cent better than the consensus estimate of analysts. Revenues rose 0.5 percent to $22.28 billion, just below the $22.33 billion expected by analysts.
The firm’s beauty business registered a 6 percent increase in net income, to $927 million, and a 2 percent increase in net income before taxes, to $1.16 billion, despite a 2 percent decline in revenues, to $5.28 billion.
The company said that gains “from market growth and innovation” helped its Prestige, Hair Care, Deodorants and Personal Cleansing products while skin care sales declined and divisional results were hampered by shifts in its geographic and product mixes.
“We’re on track to deliver our objectives of 3 to 4 percent organic sales growth and 5 to 7 percent core EPS growth for the fiscal year,” said A. G. Lafley, chairman, president and chief executive officer. “We expect strong earnings growth in the second half of the fiscal year driven by solid top-line growth, moderating headwinds from foreign exchange and productivity savings that build throughout the year.”
The company estimated that effects from foreign exchange exacted a toll on EPS of 11 cents in the quarter.
Shares of P&G jumped on the combination of the results and guidance maintenance, rising 2.8 percent, or $2.19, to $80.43 in the opening minutes of New York Stock Exchange trading. In the past 52 weeks, shares have traded in a range of $71.75 to $85.82.