On April 20th, 2021 Procter & Gamble reported 3rd quarter 2021 earnings results (see P&G’s press release here). For the quarter, the company reported top line revenues of $18.1 Billion; up 5% versus last year and beating the $17.9 Billion consensus revenue estimate. Diluted earnings per share in Q3 was $1.26 vs. a $1.19 consensus estimate. Overall ‘organic’ revenue increased 4% versus the same quarter last year. The company saw positive organic revenue gains in all but their Baby, Feminine & Family Care segment, which posted a modest 1% decline.
Both the Beauty and Fabric & Home Care segments led with organic revenues up 7% each. Prices increased 2% in four of the five segments, and CNBC reported that P&G plans to raise prices this September in response to rising commodity input costs (here).
The company maintained its fiscal 2021 ‘all-in’ sales growth forecast range of 8% to 10% versus its fiscal 2020 ‘core’ eps of $4.96. This would put P&G’s full-year ‘core’ earnings per share in a range of $5.36 – $5.46. Applying 2021 forward guidance to P&G’s April 19th, 2021 closing price ($136.61) puts price/earnings valuations between 25.0 and 25.5 times earnings.
In all, third quarter 2021 earnings beat consensus forecasts, forward guidance remains strong, and expectations remain high as P&G’s current valuation continues to trade near the high-end of the range over the past decade (14.6x in 2011 and 25.7x in 2019).
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