Shares of consumer goods giant Procter & Gamble (PG -0.78%) jumped on Tuesday after the company reported financial results for its fiscal second quarter of 2024. As of 9:45 a.m. ET, P&G stock was up 5%, which is a big move for a company of this size.
P&G delivers a mostly encouraging quarter
P&G's Q2 ended in December and sales were close to what Wall Street expected. The company generated net sales of $21.4 billion which was up 3% year over year. However, this growth was entirely driven by higher prices. By contrast, shipment volumes were down by 1%.
On the bottom line, P&G's diluted earnings per share (EPS) fell 12% year over year to $1.40. However, the decrease was largely due to a $1.3 billion impairment charge related to intangible assets for its Gillette business. Without this noncash charge, diluted EPS would have been up 16% from the prior-year period.
The outlook for 2024 is mostly unchanged
P&G maintained its guidance for full-year net sales -- management expects 2% to 4% growth. On the bottom line, it lowered its guidance to reflect the Gillette impairment charge. Previously it expected 6% to 9% diluted EPS growth, but now it expects earnings to be flat or potentially down 1%.
As one can see, growth is meager with a company as big and as established as P&G. However, it is stable and management intends to return billions of dollars to shareholders in 2024. Specifically, it intends to pay out about $9 billion in dividends while also repurchasing $5 billion to $6 billion of its stock.
P&G stock might not beat the market in 2024 due to its slow growth. However, the dividend and the share repurchases will provide an extra boost to shareholder returns.
