Ah, the old expectations game: Wall Street analysts predict a company's quarterly earnings, a number usually falling within a range of "guidance" offered by the company itself. If the company beats the Street's collective estimate, it's rewarded with a price jump. Last week, according to Reuters, 70 of the 100 companies reporting quarterly results beat analyst estimates. In this environment, heaven help the company that misses -- or merely meets -- expectations.

Like, oh, Procter & Gamble (NYSE:PG). The $0.74 per share in third-quarter earnings the company announced yesterday exactly matched analysts' estimates. Yet the stock price fell more than 2% on the day -- because analysts said they had been expecting more. They also griped that P&G's quality of earnings was not as good as expected, since roughly $0.02 of reported EPS came from gains on business divestitures.

A different perspective
That's true, but on the other hand, P&G's earnings reports are very clean. Many consumer-products companies are excluding blemishes from their operating income via "restructuring" and "one-time unusual events." I admire the way P&G reports numbers -- it avoids unusual items, and it accepts the good with the bad.

I'd call P&G's results solid -- not spectacular, but certainly not a major stumble. Total sales rose 8%, with organic sales (excluding the effects of foreign currency) up 6%. Worldwide unit volume was also up a healthy 6%. Compare this with Kimberly-Clark's (NYSE:KMB) quarterly results -- a similar 8% sales growth, but with only a 3% increase in volume. There's a lot to be said for pricing and mix, but at the end of the day, unit volume is king in my book. (See our Fool by Numbers for more details.)

Non-operating income, margin improvements, and a lower share count drove EPS to a 17% gain year over year. Pretty decent.

On the other hand ...
I'll temper my analysis with one caveat. P&G didn't report foreign currency's impact on operating income. Looking at other consumer-products companies this quarter, we can estimate this figure in the range of 2% to 4%, which would make P&G's 9% operating income increase not quite as solid.

Another factor that might concern analysts: P&G's decision to stop issuing mid-quarter earnings guidance. The company will continue to give guidance when releasing quarterly results, but it's concluded that mid-quarter updates don't add strategic value. I agree, and I'd prefer to see more companies head down the "no guidance" route firmly advocated by Warren Buffett. P&G even went out of its way not to upset the analysts by continuing its mid-quarter guidance updates until the October through December quarter.

Also, the company committed the sin of not raising full-year guidance. It did increase the bottom end of that range by $0.02, but it left the top end unchanged.

A buying opportunity?
While Avon Products (NYSE:AVP) and Colgate-Palmolive (NYSE:CL) beat expectations this quarter, P&G did not delight the analysts. I say "bingo," because the stock is likely to lag for a while. This is such a well-managed company, with enormously powerful brands, that it can be a challenge to buy into the shares at a bargain price. But contrarian investors may get that opportunity soon, especially if they're willing to defy the market's "experts." As Warren Buffett has reminded us, you often pay a very high price in the market for a cheery consensus.

For other thoughts on P&G, check out:

Colgate-Palmolive is a Motley Fool Inside Value pick. Discover more of Wall Street's best bargains with a free 30-day trial subscription.

Fool contributor Timothy M. Otte surveys the retail scene from Dallas. He welcomes comments on his articles, and doesn't own shares of any companies mentioned in this article.