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Things to Note Ahead of Procter & Gamble's (PG) Q2 Earnings

The Procter & Gamble Company PG is set to report second-quarter fiscal 2021 results on Jan 18, before the opening bell. This leading branded consumer products company is likely to have witnessed revenue and earnings growth in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s fiscal second-quarter earnings stands at $1.51, indicating a 6.3% increase from the year-ago quarter’s reported figure. However, the consensus mark has moved up by a penny in the past 30 days.

For fiscal second-quarter revenues, the consensus mark is pegged at $19.15 billion, suggesting 5% growth from the prior-year quarter’s reported figure.

In the last reported quarter, the company delivered an earnings surprise of 14%. Moreover, its bottom line beat estimates by 9.2%, on average, over the trailing four quarters.

Procter & Gamble Company The Price and EPS Surprise

 

Procter & Gamble Company The price-eps-surprise | Procter & Gamble Company The Quote

Key Factors to Note

Procter & Gamble has been gaining from the pandemic-led increased cleaning frenzy among consumers. The need to maintain good hygiene to prevent the spread of COVID-19 has led to strong demand for hand sanitizers, soaps, toilet paper, surface cleaners, disinfecting wipes, and other personal and household cleaning essentials. This is likely to have aided Procter & Gamble’s revenues in the to-be-reported quarter.

The strong demand momentum is reflected by underlying strength in brands and appropriate strategies, which have been aiding organic sales growth. Moreover, growth of premium home, health and hygiene products along with strength in the North American business mainly due to an increase in the pandemic-led consumption and inventory has been the reason behind the company’s positive mix.

Additionally, Procter & Gamble has been focused on productivity and cost-saving plans to boost margins. Continued investments in business alongside efforts to offset macro cost headwinds, and balance top- and bottom-line growth underscore its productivity efforts. It has been witnessing cost savings and efficiency improvements across all facets of business, driven by its second five-year productivity program. Moreover, gains from productivity savings and pricing have been aiding its margins, which is likely to have continued in the fiscal second quarter.

While the aforementioned factors raise optimism about the upcoming quarterly results, we remain wary of the adverse impacts of currency fluctuations on the company’s top and bottom lines.

Zacks Model

Our proven model conclusively predicts an earnings beat for Procter & Gamble this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Procter & Gamble has a Zacks Rank #2 and an Earnings ESP of +1.66%.

Other Stocks Poised to Beat Earnings Estimates

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:

The Hain Celestial Group, Inc. HAIN has an Earnings ESP of +0.59% and it presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newell Brands Inc. NWL has an Earnings ESP of +4.41% and it flaunts a Zacks Rank #1 at present.

The Estee Lauder Companies Inc. EL currently has an Earnings ESP of +2.58% and a Zacks Rank #2.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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Newell Brands Inc. (NWL): Free Stock Analysis Report
 
The Estee Lauder Companies Inc. (EL): Free Stock Analysis Report
 
The Hain Celestial Group, Inc. (HAIN): Free Stock Analysis Report
 
Procter & Gamble Company The (PG): Free Stock Analysis Report
 
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