Image source: Getty Images.

Thanks to slight differences in the way it tracks its fiscal year, Unilever (NYSE:UL) usually posts quarterly earnings results a few days ahead of Procter & Gamble (NYSE:PG), its consumer goods rival. That calendar quirk lets P&G investors get an early look at what they can expect to hear from their own management team about the prevailing industry trends.

Unilever this week announced steady sales growth and affirmed its full-year outlook, but there were a few worrying points that suggest P&G might have downbeat news for shareholders when it posts its results on Oct. 25.

Volume decline

Unilever's organic growth pace fell to 3% from the 5% it enjoyed in each of the prior three quarters. That's not a problem by itself, since the gains were within management's forecast range, and Unilever still believes it will grow at a 4% pace this year.

Image source: Unilever investor presentation.

Looking deeper into the results reveals a major red flag, though. Unilever's growth came completely from price increases, and organic sales volumes declined overall. UL, like P&G, aims to produce market-beating sales growth that's driven mainly by volume gains. After all, price hikes can't produce consistent, long-run expansion. But the company came up short of that goal in a rare miss this quarter.

The biggest bright spot in P&G's last quarterly report was its return to volume growth after more than a year of declines. That rebound helped produce an encouraging sales bounce and is also key to executives' goal of delivering a growth uptick for the full year. That's why a volume drop, if it hits Procter & Gamble, too, might force P&G to lower its outlook later this month.

Industry struggles

Unilever had nothing but negative comments about the state of consumer goods industry. "Demand remained weak," the company said in a press release, as growth "slowed further." 

Management went into more detail in an investor presentation, citing falling consumer confidence, rising commodity costs, and volatile currency exchange rates.

Image source: Unilever investor presentation.

These are the same factors P&G has been struggling against for a few years now, so the company likely included them in their sales growth outlook for fiscal 2017. Still, P&G might have hoped for at least a flat overall market -- not one that's shrinking.

It wasn't all bad news for P&G on this score, though, as Unilever posted a broad uptick in the key U.S. market, which suggests that geography is holding steady even as other areas of the world are slowing. P&G gets a larger chunk of its profits from developed economics like the U.S., so a strong performance there might be good enough to offset weakness in regions like Latin America and Asia.

Can P&G surprise investors?

P&G and Unilever compete in many of the same product categories and markets. But the overlap doesn't mean that lower results for one company translate into market share gains by the other. Instead, it's much more likely that the challenging selling conditions Unilever is reporting will also be cited by P&G later this month as drivers behind its own low-growth results.

P&G shareholders have some encouraging news to look forward to when hearing from management in the next quarterly release, including updates on the company's ramped-up cash return plans and improved marketing spending. They aren't likely to see evidence of strong overall sales volume growth, though, or of an upturn in the broader industry.

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