Will Procter & Gamble Earnings Move the Dow?

With hundreds of companies having reported quarterly results, we're now in the heart of earnings season. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk decision.

Let's turn to Procter & Gamble (NYSE: PG  ) . With its gain of 5% coming in a bit shy of the performance of the Dow Jones Industrials (DJINDICES: ^DJI  ) in 2012, P&G has received an unusual amount of attention from investors seeking to get the company to take steps to improve its future results. Let's take an early look at what's been happening with Procter & Gamble's over the past quarter and what we're likely to see in its quarterly report on Friday.

Stats on Procter & Gamble

Analyst EPS Estimate

$1.11

Change From Year-Ago EPS

1%

Revenue Estimate

$21.89 billion

Change From Year-Ago Revenue

(1.1%)

Earnings Beats in Past 4 Quarters

4

Source: Yahoo Finance.

Will Procter & Gamble move the markets?
P&G has inspired confidence among analysts, as estimates have climbed slightly over the past few months. Having delivered four straight earnings beats, including a massive $0.10 per-share positive surprise in the September quarter, P&G is nevertheless expected to show just minimal year-over-year growth. Investors are similarly cautious: The stock has gained just 3% since mid-October.

Investors' concern owes partly to P&G's lack of an aggressive response to challenging conditions. Industrywide, P&G shares the same problem of high-cost raw materials as Unilever and Colgate-Palmolive, but P&G hasn't done as good of a job as those rivals in focusing attention on faster-growing emerging markets. Despite its worldwide brand presence, P&G needs to do more to shore up its once-dominant position in many areas around the world.

Investors will also need to read between the lines of P&G's report to see whether or how it's responding to attention from Bill Ackman. Although Ackman has seemingly directed most of his efforts toward Herbalife lately, his criticism of P&G leadership may draw responses from CEO Robert McDonald in his conference-call comments.

Procter & Gamble has made investors nervous with its uncharacteristically tentative behavior. Look for signs that the company is reversing that trend for the long run before you get too excited about whatever P&G reports on Friday.

Learn more
The top Dow stocks are worth investing in, but does P&G make the cut? Find out in the Fool's newly updated special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.

Click here to add Procter & Gamble to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


Read/Post Comments (0) | Recommend This Article (3)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2210280, ~/Articles/ArticleHandler.aspx, 10/22/2014 8:55:00 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement