Procter & Gamble Beats Q1 Estimates on Volume Growth, Raises Cost Impact Forecast to $1.4 Billion

Procter & Gamble (PG) reported fiscal first-quarter revenue and earnings above market expectations, as a strategy of moderating price increases to drive volume growth paid off. Shares rose as much as 3.2% to $161.88 in premarket trading Thursday, and were up 2.74% at $161.14 ahead of the deadline. Revenue for the quarter ended in September rose 4% year over year to $23.28 billion, topping estimates of about $22.8 billion. Adjusted earnings per share were $2, flat with a year earlier and above the $1.88 analysts expected. Organic sales grew 4%, the fastest in three years and above the 2% consensus, with overall volumes up 2.4% and pricing up about 0.4%. Beauty grew 5%, while health care and home care rose 3% and 5%, respectively. P&G raised its estimate for the full-year earnings hit from higher raw material, energy and transportation costs to about $1.4 billion from $1 billion previously, citing fuel prices and truck driver shortages. Core operating margin fell 80 basis points in the quarter. The company maintained its full-year organic sales growth outlook of 1% to 3% and adjusted EPS forecast of $6.89 to $7.11, while lifting its overall revenue growth forecast to 2% to 4% following the $3.8 billion acquisition of health brand Thorne, completed October 1.