P&G sees increase in 1Q core EPS
CINCINNATI — Procter & Gamble announced on Thursday a decrease in both first-quarter net sales and diluted earnings per share from continuing operations, as core earnings per share rose 5%.
For the July-September period, net sales totaled $20.7 billion, a decrease of 4% compared with the year-ago period — including a negative 6% impact from foreign exchange.
Diluted net earnings per share from continuing operations were 96 cents, a decrease of 5% due to noncore charges of 10 cents. Core earnings per share rose 5%, to $1.06 for the quarter.
“Our first-quarter results put us on track to deliver our commitments for the fiscal year. Results were at the high end of expectations on the top line and ahead of plan on operating profit, earnings per share and cash,” stated chairman, president and CEO Bob McDonald. “We are continuing to focus on executing our growth and productivity strategy – maintaining momentum in developing markets, strengthening our core developed market business, building a strong innovation pipeline, and aggressively driving cost savings and productivity improvements. We’re confident that this strategy will enable P&G to generate superior levels of shareholder return in both the short- and long-term.”
For the October-December quarter, P&G expects core EPS in the range of $1.07 to $1.13, down 2% to up 4%, compared with prior year core EPS of $1.09. On an all-in basis, P&G is forecasting earnings per share in the range of $1.18 to $1.25, an increase of 111% to 123% versus prior year EPS from continuing operations of 56 cents.
Colgate releases 3Q results, announces four-year restructuring program
NEW YORK — Colgate-Palmolive reported on Thursday a dip in third-quarter sales and unveiled a four-year restructuring program that involves a 6% reduction in its global employee workforce.
The program’s initiatives are expected to help Colgate ensure continued worldwide growth in unit volume, organic sales and earnings per share and enhance its global leadership positions in its core businesses, the company stated. Savings are projected to be in the range of $365 million to $435 million ($275 million to $325 million after tax) annually by the fourth year of the program.
Initiatives under the program will focus on the following three areas:
- Expanding Commercial Hubs – Building on this structure already implemented in several divisions, continue to cluster single-country subsidiaries into more efficient regional hubs, in order to drive smarter and faster decision making, strengthen capabilities available on the ground and improve cost structure.
- Extending Shared Business Services and Streamlining Global Functions – Implementing the company’s shared service organizational model, already implemented in Europe, in all regions of the world. Initially focused on finance and accounting, these shared services will be expanded to additional functional areas to streamline global functions.
- Optimizing Global Supply Chain and Facilities – Continuing to optimize manufacturing efficiencies, global warehouse networks and office locations for greater efficiency, lower cost and speed to bring innovation to market.
It is expected that by the end of 2016, the restructuring program will reduce the company’s global employee workforce by approximately 6% from the current level of 38,600, the company stated.
“As we look ahead to 2013, while our global budget process is still in its initial stages, based on the company’s current growth momentum, our confidence in this new efficiency program in addition to our ongoing funding-the-growth and strategic worldwide pricing efforts, we are planning for a return to our long-term target of double-digit earnings per share growth on a dollar basis and another year of gross margin expansion, excluding charges related to the 2012 restructuring program,” stated Ian Cook, chairman, president and CEO.
For the third quarter, the company posted worldwide net sales of $4.33 billion, a decrease of 1% compared with the year-ago period.
Net income and diluted earnings per share were $654 million and $1.36, respectively. Net income and diluted earnings per share in third quarter 2011 were $643 million and $1.31, respectively.
In North America, net sales rose 2.5%, and operating profit rose 3% during the quarter to $219 million, or 27.5% of net sales.
In the United States, Colgate’s toothpaste market share reached 36.2% year-to-date, up 1.2 share points versus a year ago, driven by strong sales of Colgate Optic White toothpaste. In manual toothbrushes, Colgate’s market share reached 37.3% year to date, up 1.8 share points versus a year ago, driven by the success of Colgate 360° Optic White, Colgate 360° Sensitive Pro-Relief, Colgate 360° Total Advanced and Colgate Extra Clean manual toothbrushes, the company stated.
Revlon posts 3Q results
NEW YORK — Beauty company Revlon posted a net loss for the third quarter due to charges, as sales rose 2.9% thanks to higher net sales of Revlon color cosmetics and the inclusion of net sales of Pure Ice.
Net sales for the quarter totaled $347 million, up $9.8 million, or 2.9%, compared with the year-ago period. Excluding unfavorable foreign currency fluctuations, net sales rose 4.8%.
Net loss for the quarter was $15 million, or 29 cents per diluted share, which included $24.1 million ($23.1 million after tax) of restructuring and related charges and another charge of $2.2 million, before and after tax, related to the litigation, compared with net income of $500,000 or nil per diluted share. Net loss in the third quarter of 2012 included $11.5 million of income tax expense, compared with $22.1 million in the third quarter of 2011.
In the United States, net sales were $192 million, an increase of 4% compared with the same period last year. According to the company, the increase was primarily driven by higher net sales of Revlon color cosmetics and the inclusion of the net sales of Pure Ice. These increases were partially offset by lower net sales of Almay color cosmetics, Revlon ColorSilk and Mitchum antiperspirant deodorant.
“In the third quarter, we continued to execute our strategy of profitably growing our business as we grew net sales by 4.8%, maintained competitive operating income margins, and improved free cash flow. We continue to bring highly innovative, consumer-preferred new products to the marketplace. In the quarter, we also announced actions to drive operating efficiencies, which, once fully implemented, are expected to generate annualized cost reductions of approximately $10 million. These actions are further enabling us to invest in the execution of our strategy while maintaining highly competitive margins,” stated Revlon president and CEO Alan Ennis.