By Dhirendra Tripathi
Investing.com – Procter & Gamble (NYSE:) stock was trading 2.5% higher after the company rode higher sales, more volumes and increases in its product prices to beat all estimates for the fourth quarter.
Traders seemed to look through its warning of higher commodity costs and freight costs for the ongoing financial year.
A 7% rise in net sales to $18.9 billion resulted in the Ariel detergent maker to beat analysts’ estimate of $18.37 billion.
The company benefited from higher sales of its costlier products. This happened with the company’s health care segment and skin and personal care category, where products typically carry prices higher than company-average selling prices.
The company raised product prices to pass on higher costs of raw materials that go into making its products.
Year-on-year changes in sales of different category of products varied from geography to geography and where those economies stood last year and where they are now, depending on the Covid situation and the level of lockdown.
So as work resumed and more people started to go to offices and meet friends and relatives, sales of Head & Shoulders shampoo and grooming products like Gillette shaving blades and cream bounced back.
But sales of appliances fell as they had increased disproportionately last year when people stayed home and indulged in do-it-yourself activities.
Diluted net earnings per share were $1.13 for the quarter, a 6% increase versus the prior year reported EPS due to a 4% increase in net earnings and a reduction in shares outstanding. It was ahead of the $1.09 that analysts expected.
Vice Chairman and Chief Operating Officer Jon Moeller, who replaces David Taylor as President and Chief Executive Officer from November 1, has his targets cut out.
P&G expects sales in the ongoing financial year to come between $77.62 billion and $79.14, growing by 2%-4% from 2021 levels.
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