Procter & Gamble (NYSE:PG), the largest U.S. household-products company, reported yesterday that it expects next quarter's sales to increase 14% to 18%. Most importantly, 7% to 8% of that growth will be organic (i.e., not from acquisitions).

The company pointed out that the current quarter will be the eighth to exceed its long-term sales growth target of 4% to 6%. The current quarter's sales growth will be aided by 3% to 4% from foreign currency and 6% to 8% from acquisitions and divestitures, especially the Wella hair-care acquisition.

P&G's earnings news is equally exciting. The company is "comfortable" with consensus earnings estimates of $1.27 per share, up 12.3% from the same quarter last year.

P&G's pharmaceuticals business, with sales exceeding $800 million annually, now has a runaway success in the heartburn drug Prilosec. Prilosec is expected to generate sales of $200 million to $400 million in its first year.

But that doesn't mean it will be easygoing for P&G. Competition is fierce. Rivals such as Colgate-Palmolive (NYSE:CL) and Kimberly-Clark (NYSE:KMB) are financially strong companies. Only Playtex (NYSE:PYX) is in a financially weak position.

Investors are certainly comfortable with P&G's financial strength. The company reaffirmed its guidance of $4.53 EPS for this fiscal year. At the current price of $96.14, that is a price-to-earnings (PE) ratio of 21 -- a premium for a company with a long-term growth target of 4% to 6%.

Obviously, investors expect P&G to continue with successful product introductions and acquisitions. Total debt of $17 billion might give conservative investors the need for a nightly sleep aid -- until they realize that P&G has $6 billion in free cash flow.

Procter & Gamble is the classic example of a cash cow. It is also a classic example of a company using its cash to fund an exciting future.

Although not a shareholder in P&G or any of the companies mentioned, W.D.'s home is a gathering place for P&G "foundation" brands like Tide, Charmin, and Bounty. A gathering place for shareholder banter is the Procter & Gamble discussion board. Email W.D. at