P&G's Losing Gamble: Fool by Numbers

On May 3, Procter & Gamble (NYSE: PG  ) released Q3 2006 earnings for the period ending March 31.

  • Sales of $17.25 billion came up $350 million short of Street expectations.
  • Margins improved across the board, thanks to pricing power, increased volume, and cost savings.
  • Management raised the mid-point of full-year guidance by $0.02 because of what it said was "strong business performance" and good progress in integrating Gillette, which it acquired last March.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$17,600

$17,250

$14,287

20.7%

Net Profit

--

$2,211

$1,614

37%

EPS

$0.61

$0.63

$0.59

6.8%

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change

Gross Margin

51.65%

50.62%

1.03

Op. Margin

19.43%

17.79%

1.63

Net Margin

12.82%

11.30%

1.52

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash+ ST Invest.

$10,199

$8,778

16.2%

Inventory

$6,732

$5,270

27.7%

Accounts Rec.

$5,404

$4,396

22.9%


Liabilities

Q3 2006

Q3 2005

Change

Long-Term Debt

$33,916

$12,936

162.2%

Accounts Pay.

$4,063

$3,407

19.3%

Learn the ways of the balance sheet.

Cash Flow Checkup

Q3 2006

Q3 2005

Change

Cash From Ops

$8,185

$6,589

24.2%

Capital Expend.

$1,666

$1,386

20.2%

Free Cash Flow

$6,519

$5,203

25.3%

Find out why Fools always follow the money.

Related Companies:

  • Church & Dwight (NYSE: CHD  )
  • Clorox Co. (NYSE: CLX  )
  • Colgate-Palmolive (NYSE: CL  )
  • Johnson & Johnson (NYSE: JNJ  )
  • Kimberly Clark (NYSE: KMB  )
  • Unilever (NYSE: UL  )

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so checkFool.comfor more of our in-depth discussion of what the numbers mean.

Unilever is aMotley Fool Income Investorselection. Colgate-Palmolive is aMotley Fool Inside Valuepick. Check out our entire suite of newsletters by clicking here.

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.


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

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.

DocumentId: 513368, ~/Articles/ArticleHandler.aspx, 4/20/2014 10:49:14 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