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With the way the market is fluctuating lately, I sometimes feel like I'm gambling instead of investing. That's why it does my heart good to see companies delivering consistent solid growth for skittish investors.

Good old Procter & Gamble (NYSE: PG  ) produced its usual respectable first-quarter earnings today, highlighted by 9% revenue growth and 12% EPS gains in the wake of rising commodity costs.

Uncle Procter (as I fondly call my former employer) delivered 5% organic sales growth, which excludes price increases, mergers and acquisitions, and foreign exchange earnings padding. This sales growth was primarily triggered by the introduction of several new products during the quarter, with double-digit sales increases for products including Head & Shoulders, Cover Girl, and the high-end Gillette Fusion razors. Yes, people still wash their hair, apply makeup, and shave when the economy stinks.

Overall, price increases contributed 3% to P&G's sales growth. Cost of goods sold jumped by 15%, but the company managed to increase net earnings by 9% by keeping selling, general and administrative (SG&A) cost increases to 3%. Operating margin did drop by 60 basis points for the quarter, while net margin remained even.

Strong results for consumer products stocks aren't a given these days, even if they will provide your portfolio with some added defense. Last week, key P&G competitor Kimberly-Clark (NYSE: KMB  ) delivered uninspiring third-quarter results with volume drops driven by pricing increases and lower fourth-quarter earnings guidance. We'll get a fuller picture of the industry tomorrow when Unilever (NYSE: UL  ) and Colgate-Palmolive (NYSE: CL  ) announce their most recent earnings.

And Procter & Gamble isn't immune to the unpredictable market. P&G dropped the low end of its EPS range by $0.03, to $4.15, reflecting foreign exchange and commodity price volatility. Foreign exchange and currency fluctuations are also driving P&G to lower its overall annual sales forecast by 4%.

That said, P&G continues to deliver predictable results. This is the company's 25th consecutive quarter with organic sales growth at or above target. With a P/E of 15 times this year's expected earnings and solid dividend yield, Procter & Gamble looks like a continued "safe" investment through turbulent times.

Related Foolishness:

Kimberly-Clark and Unilever are Motley Fool Income Investor stock recommendations. Looking for more advice in an all-consuming market? Give any or all of The Motley Fool's newsletters a try with 30-day free trials.

Fool contributor Colleen Paulson owns shares of Procter & Gamble, but does not hold positions in any other companies mentioned above. The Fool's disclosure policy gives a shout-out to all of the Proctoid readers in the house.

Read/Post Comments (3) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 29, 2008, at 1:50 PM, weiwentg wrote:

    Like all the other consumer products companies, P&G will be vulnerable if materials and energy costs rise; I'm sure these contributed significantly to the 15% growth in cost of goods sold. However, oil isn't above $100 a barrel anymore. I am guessing oil prices will rise eventually, but not catastrophically, and that P&G should be able to keep a lid on its costs. Also, P&G has been very good at managing brands and convincing consumers to buy their brands.

  • Report this Comment On October 29, 2008, at 6:38 PM, SmartStop wrote:

    Hmmm... I don't see it. P&G looks like my grandfather's oldsmobile -- steady, dependable, but kinda boring.

    I took a look at P&G's Smartstop ( history for the past year, and while its a bit more stable than a lot of stocks, it's still throwing off a fair number of short and long-term exit alerts.

    Doing the math, I wonder if,

    P&G is to Oldsmobile as ??? is to Toyota,

    solve for ??

  • Report this Comment On November 15, 2008, at 8:14 PM, elo8 wrote:

    Dr. Tantillo, who has marketing and branding blog ( ), typically nominates a weekly brand 'winner' and 'loser,' and chose P&G two weeks ago as the winner: "Ultimately P&G is a marketing company —a company that owns, develops and innovates many brands, and it was this company that responded to the shift away from candles by mastering new markets as they emerged."

    Tantillo's full post:

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Related Tickers

10/20/2016 4:00 PM
PG $84.93 Down -0.61 -0.71%
Procter and Gamble CAPS Rating: ****
CL $70.92 Down -0.39 -0.55%
Colgate-Palmolive CAPS Rating: ****
KMB $119.17 Down -1.04 -0.87%
Kimberly-Clark CAPS Rating: ****
UL $42.77 Up +0.31 +0.73%
Unilever CAPS Rating: *****