Consensus estimate indicates disappointment
So far, Procter & Gamble (PG) has impressed with its bottom-line performance and has a strong track record of exceeding analysts’ expectations. Procter & Gamble has exceeded analysts’ earnings estimates in the last 13 consecutive quarters, with an average earnings surprise of 4.4%. This performance comes amid a weak sales and margins environment.
However, analysts’ projections for the first quarter indicate disappointment. Analysts expect Procter & Gamble to report adjusted EPS of $1.10, which reflects YoY (year-over-year) growth of 0.9%.
Factors that could impact P&G’s Q1 EPS
Analysts expect Procter & Gamble’s (PG) earnings in the first quarter of fiscal 2019 to take a hit from the anticipated decline in sales. Lower pricing as well as higher commodity, packaging, and shipping costs could subdue its earnings.
Unfavorable mix and a strengthening US dollar are expected to dent its earnings. However, cost savings, a lower effective tax rate, and a decline in its outstanding share count are expected to cushion the company’s bottom line.
Consumer packaged goods manufacturers’ bottom line figures have benefited from the US tax reforms and lower outstanding share counts. Kimberly-Clark (KMB), Colgate-Palmolive (CL), and Clorox (CLX) have improved their bottom lines despite soft sales and input cost headwinds.
Analysts expect consumer packaged goods manufacturers’ bottom lines to take a hit in the upcoming quarter, resulting from continued inflation in their manufacturing, packaging, and transportation costs.