Transcript of "Procter & Gamble Earnings Preview: The Absolute Essentials"
Procter & Gamble
P&G Fiscal 2014 Fourth Quarter
Are investors looking for Cheer?
Image: Procter & Gamble.
• P&G is shooting for 3%-
4% organic revenue
growth this year.
• On track through the
first three quarters of
• Company should hit at
least 3% organic
revenue growth in this
final quarter of the
“Tide on the Shelf” image by Lisa Brewster
under Creative Commons license.
• Earnings have not impressed so far in fiscal
• Through the first three quarters, operating
income is up only 2.6% versus prior year.
• Will P&G make up some ground in Q4?
• Productivity and
Productivity & Cost Cutting
“Global Ops” image: Procter & Gamble.
• P&G measures “free cash flow productivity”
(FCFP): free cash flow divided by earnings.
• FCFP was 120% last quarter.
• Cash flow should still be strong, but look for
Q4 FCFP to be closer to last year’s total
average of 95%, due to anticipated
increased spending on capital equipment.
• P&G has kept a fairly leveraged balance
sheet for years.
• Traces back to Gillette acquisition in
• Look for any reduction in the $36.4
billion of long-term debt this quarter.
• Bright spots: Double-
digit growth in India
for 47 consecutive
• Hot spots: Any
impacts from Russia
• Sinkholes: Updates
Bright Spots, Hot Spots, & Sinkholes
Duracell marketing in Caracas, Venezuela metro. Image
by Cabruta08 under Creative Commons license.
• P&G announced a total
revamp of its North
American supply chain
earlier this year.
• Converting existing single-
category plants into multi-
• Progress in Q4?
• Look for update on initial
sales of new Gillette Fusion
ProGlide with Flexball razor.
• Analysts will be eager to
hear about innovation
pipeline for fiscal 2015.
Fusion ProGlide with Flexball image:
Procter & Gamble.
• Share buybacks
should be winding
billion in Q4.
• No surprises
Dividend and Share Repurchases
P&G Research Facility, Singapore. Image: Procter & Gamble.
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