Dow component Procter & Gamble (NYSE:PG) reported earnings yesterday. Once again, we see proof that the company is capable of leveraging its vast portfolio of brands to promote solid performance. Let's check out some highlights.

For the fourth quarter, net sales advanced 25% to $17.8 billion. Operating income increased 37% to $2.9 billion. Net income jumped 36% to $1.9 billion, or $0.55 per diluted share. For the full fiscal year, net sales increased 20% to $68.2 billion. Operating income moved up 27% to $13.2 billion. Net income expanded 25% to $8.7 billion, or $2.64 per diluted share.

The numbers need to be put into a perspective, however, since P&G's relatively recent acquisition of Gillette is affecting the earnings scenario. Excluding the impact of such acquisitions to concentrate solely on organic growth data, investors will find that P&G still performed decently -- organic sales increased 8% for the quarter and 7% for the full year.

In addition, let's look at the growth of diluted earnings per share on a percentage basis (as opposed to the sole dollar basis I quoted above). Diluted net earnings per share jumped only 6% for the quarter, and only 4% for the full year. The Gillette buyout contributed an estimated $0.06 and $0.08 per share in dilution for the quarter, and between $0.20 and $0.23 per share for the fiscal year. P&G pointed out that without the dilution, the per-share growth rates are in the double digits.

P&G is holding up very well in the current inflationary environment. I guess it's true what they say -- people will still spend money on their favorite household goods, even as product prices and energy costs rise. Margins have improved, and free cash flow rose 34% for the past twelve months (helped out by the Gillette business). In fact, P&G likes to measure free cash flow productivity by seeing what that number represents as a percentage of net earnings. For the year, the productivity was 100%, topping the company's 90% target.

Procter & Gamble is forecasting continued earnings appreciation. It estimates that 2007 will see organic sales growth fall between 4% and 6%, while earnings growth comes in somewhere between 12% and 14%, the latter including the impact of the Gillette dilution. Although Gillette's products are currently seeing weak sales growth, the addition of its battery and blade brands should aid P&G's valuable portfolio going forward.

P&G is a reliable blue-chip company and stock, competing effectively against the likes of Colgate-Palmolive (NYSE:CL), Clorox (NYSE:CLX), and Energizer (NYSE:ENR). Its five-year chart looks nice, and it is currently yielding more than 2%. I believe this equity is a great long-term core holding; if you see it at an even higher yield, do yourself a favor and take a hard look at this stalwart operation.

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Fool contributor Steven Mallas owns none of the companies mentioned. The Fool has a disclosure policy.