Procter & Gamble (PG 0.11%) will release its quarterly report on Friday, and investors have watched the stock hit new all-time record highs in November before falling back in the past two months. Despite the optimism, Procter & Gamble earnings face pressure from international giant Unilever (UL 0.34%) as well as domestic rivals Colgate-Palmolive (CL 1.77%) and Kimberly-Clark (KMB 0.17%). The question facing investors is whether P&G can sustain its longtime competitive advantages against its rivals and bolster its growth.

Procter & Gamble has a place in billions of households around the world, with a huge stable of billion-dollar-selling brands in its consumer-products arsenal. Yet despite the promise of global growth from a rising middle class in emerging-market economies, P&G has had to deal with sluggish revenue gains from its core business. How can the company make the most of the huge opportunities it has? Let's take an early look at what's been happening with Procter & Gamble over the past quarter and what we're likely to see in its report.

Stats on Procter & Gamble

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$22.35 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can Procter & Gamble earnings start growing faster again?
In recent months, analysts have pulled back on their views about Procter & Gamble earnings, cutting their fourth-quarter estimates by $0.03 per share and their full-year fiscal 2014 and 2015 projections by a penny per share each. The stock is essentially unchanged from mid-October levels, despite having been up significantly earlier in the quarter.

Procter & Gamble's third-quarter results gave investors new hope that the company can restore its strength through global growth. Organic sales in emerging markets grew by 8%, well outpacing its domestic organic growth of 2%. By contrast, Unilever, which has had a much better history in recent years in capitalizing on emerging markets, had relatively weak performance there, suggesting some customer shifting of demand toward P&G. It appears likely that P&G's strategy to narrow its focus on just 10 key emerging nations has paid off by helping the company better address specific needs of certain demographic groups. More broadly, the company's revenue gained 2%, leading to an 8% jump in net earnings per share with solid results from the Fabric Care and Home Care segment as well as the Baby, Feminine, and Family Care business.

Still, some investors believe that smaller rivals Kimberly-Clark and Colgate-Palmolive have more growth potential. The problem, though, is that P&G stock looks most attractively valued even considering its growth prospects, with superior profit margins and a healthier balance sheet than either of its two domestic competitors. Kimberly-Clark, by contrast, has taken a higher-risk profile with its more concentrated portfolio of paper-based personal-care products. That has paid off thus far, but P&G's more diversified approach could make it a safer play going forward.

Moreover, Procter & Gamble has made efforts to restructure its operations to improve efficiency. That's been a necessary response to similar efforts at Unilever and Colgate-Palmolive, with Unilever having boosted its personal-care exposure while Colgate has bought a key European oral-care company to strengthen its namesake dental brand. For Procter & Gamble, expanding its worldwide beauty and grooming business to incorporate a more focused product line addressing baby products, beauty, health and grooming, and fabric and home care on a global basis could give it more international growth power.

In the Procter & Gamble earnings report, watch to see whether the company is able to sustain superior organic growth compared to its rivals. With investors worrying about the stock's price, a dose of growth power could restore confidence and send the stock to new record highs once again.

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