Connect
To Top

P&G Shocks Wall Street Analysts With Stock Rise

When it comes to some of the biggest and some of the oldest companies in the United States, Procter & Gamble will always be on the list. For more centuries now, they have dominated not just the entire American households but also the whole world with their products. They have recorded their biggest sale back in 2014 wherein they have reached $83.1 billion in sales. Founded 180 years ago, experts seem to think that P&G might be losing its touch and is getting left behind. This was proved by how much their shares and stock price have been consistently going downwards for the past few years, until now.
Over the course of 2018, the stock price of Procter and Gamble was going downwards. The reason is said to be because of the falling prices as well as rising cost inflation. Over the past couple of years the company has been referred to as being too big with too little growth. However, things may be changing for them as their shares jumped just a couple of days ago, which totally surprised the stock market.

As of 2017, Procter and Gamble’s net income has already reached their $15 billion mark while having less than a hundred thousand employees

P&G Makes An Unexpected Comeback

The company’s shares soared last Friday by 7 percent, and the reason behind it is said to be because of how the beauty section’s higher revenue growth which made it the strongest quarterly gains. Their profit outlook was also maintained for the entire year and this is something that they haven’t seen in the past five years from one of the country’s biggest companies.

In the last few quarters, it was reported how Procter and Gamble actually struggled to grow their sales, but according to the company, they have managed to sell a higher volume of goods this last quarter compared to the previous ones. This was all thanks to the healthier economy of the country, which means people have more money to shop more.
The 7 percent stock rise was considered to be the leading gainer for the S&P 500 Consumer Staples Index. It may. It be high but considering how much it has fallen over the years as well as the rest of the shares in the market fall about 11 percent, the company managed to make it to the top having the market cap rise up to $202 billion.

Wall Street only expected them to have $1.09 per share, but P&G managed to push it higher to $1.12 per share. As for their revenue, Wall Street expected them to have only $16.46 billion, but the company reached $16.69 billion.

 

Procter and Gamble’s annual revenue continued to decline since 2006 and 2016’s fiscal year was their lowest point

According to their chief executive officer, David Taylor, this is actually allowing them to be able to keep track so they can deliver their top-and-bottom line targets for the year, which ended last September 30 for the net income quarter.

Even if the $16.69 billion sales of this year is not that big of a change from the $16.65 billion from last year, it is still way more than what the analysts have actually expected. The beauty division of the company, which includes some of the biggest brands like Pantene, have had a 5 percent increase.

Beauty Division Rises Up

The company’s CFO, Jon Moeller believed that almost every single product that is under the beauty section is growing. The previous quarter raise proved that. However, the largest unit of Procter and Gamble, which is the fabric and home care division, also amped up its sales even if it is only by 2 percent.

All the net sales from those two divisions helped cover up the decline of the other divisions of the company such as the 1 percent decline from the grooming division, 3 percent decline from the healthcare and another 3 percent drop from the baby and feminine care division.
Experts from Wall Street is now expecting a soli fiscal year of 2019 from the company, even just for their first quarter. However, it is reported by some experts from Forbes that they are expecting a decline in the revenue towards the second quarter.

More in Business

Leave a Reply

Your email address will not be published. Required fields are marked *