Get All Access for FREEMarket News & Research,
Live Transcripts & Audio,
and a whole lot more…
$PG plans to continue to keep bottom-line growing and to be growing margins through productivity which will both provide fuel for reinvestment and for margin improvement. $PG really doesn't view pricing and promotion as high in terms of its options to grow business. $PG is going to be continuing to invest in business to drive margins.
$PG said it will continue its strong track record of cash returned to shareholders. $PG expects to pay nearly $7.5Bil in dividends this year. $PG is lifting FY18 share repurchase outlook from $4-7Bil to $6-8Bil, reflecting strong operating cash flow, continued working capital progress, and the cash benefit enabled by the Tax Act.
$PG had already reduced number of agencies nearly 60% from 6,000 to 2,500, saved $750MM in agency and production costs, and improved cash flow by over $400MM additional through 75 day payment terms. In next phase, $PG expects to save another $400MM reducing number of agencies by another 50% and implementing new advertising and media agency models.
$PG's core gross margin for 2Q18 declined 80 basis points versus year ago. 150 basis points of productivity savings were more than offset by headwinds of 90 points from higher commodity costs, 70 basis points of mixed impact, 50 basis points from pricing primarily Gillette, and 40 basis points of reinvestment in product and packaging innovation.
$PG said commodity prices have continued to move higher as the year has progressed approaching a $350MM after-tax impact versus year ago for FY18. $PG had expected to see higher pulp costs going into the year. These costs have continued to increase beyond initial forecast ranges with strong demand and some recent supply disruption.
$PG lifted FY18 core EPS growth outlook to 5-8% from 5-7% versus FY17 core EPS of $3.92. This is to reflect the potential benefit from the Tax Act. GAAP EPS are expected to decrease 30-32% versus FY17 GAAP EPS of $5.59, which included the significant benefit from the Beauty Brands transaction that was completed in October 2016.
$PG maintained its organic sales growth estimate of 2-3% for FY18. The company estimates all-in sales growth of about 3% for FY18, which includes a neutral to half-a-percentage-point benefit to sales growth from the combined impacts of acquisitions and divestitures and foreign exchange.
$PG's net sales for 2Q18 rose 3% year-over-year. This includes a 1% positive impact from foreign exchange. Organic sales and volume both increased 2%. A 1% positive mix impact from the disproportionate growth of higher priced categories, Skin & Personal Care and Personal Health Care, was offset by a negative pricing impact of 1%.
$PG reported a 68% drop in 2Q18 earnings due to the Beauty Brands divestiture gain in the base period and the latest quarter net income tax charge related to the recent U.S. Tax Cuts and Jobs Act. Net income fell to $2.5Bil or $0.93 per share from $7.88Bil or $2.88 per share last year. Net sales rose 3% to $17.4Bil. Core EPS increased 10% to $1.19.
$PX signed a long-term contract with an electronics manufacturer in Shanghai, China. $PX will build, own and operate multiple air separation plants that will supply high-purity nitrogen & oxygen to EverDisplay Optronics (EDO), the first mass producer of 4.5-generation AMOLED displays in China. EDO will invest more than US$4.1Bil in its new project.
$PPG said it expects to achieve $45-50MM of the remainder of its $125MM restructuring program in fiscal 2018. The tax rate on earnings from continuing operations is estimated to be in the 23- 24% range, a tad lower than the 2017 level. This year, PPG targets to deploy around $2.4Bil of cash on either acquisitions or share repurchases.
$PPG expects its initiatives to address raw material inflation will yield results in the first half of this year, by bringing in significant raw material efficiency. While focusing on the overall cost structure, PPG plans to continue to execute on its restructuring program. The company expects acquisition-related sales gains of $125MM in FY18.
$PPG said the volume growth in 4Q17 was supplemented by acquisition-related gains from Crown Group, which was added to its fold in October 2017. The company is working with retail firm $HD to have its Timeless product added to more retail locations. In the current fiscal year, PPG plans to spend about $20MM on additional growth-related activities.
$PPG, a manufacturer of coatings, reported an 8% growth in sales to $3.7Bil in 4Q17, helped mainly by higher selling prices and favorable currency rates. Net earnings were $0.73 per share, compared to $1.31 per share in 4Q16, which included one-time gains. Adjusted for special items, 4Q17 earnings were $1.19 per share, up 3% from last year.
$PX expanded its long-term hydrogen supply agreement with Motiva Enterprises LLC. $PX will increase the amount of hydrogen it supplies to Motiva's about 600,000 barrel per day refinery in Port Arthur, Texas. This agreement secures the additional hydrogen required to support that expansion, as well as the ongoing needs of the refinery.