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).
This material is provided by Schmitt Wealth Advisers for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Opinions expressed by Schmitt Wealth Advisers are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Schmitt Wealth Advisers, however, cannot guarantee the accuracy or completeness of such information. Past performance may not be indicative of future results.
