PG Procter and Gamble Co

By Micah Maidenberg

Procter & Gamble Co. (PG) is scheduled to report its fiscal second-quarter results before the market opens Thursday. Here is what you need to know:

EARNINGS FORECAST: P&G is expected to report a profit of $1.39 a share, or $1.37 a share following adjustments, per the consensus estimate from FactSet.

REVENUE FORECAST: Analysts believe the Cincinnati-based consumer-products giant will generate $18.42 billion in revenue.

OUTLOOK: In October, Procter & Gamble raised the upper end of its organic-sales forecast for its 2020 fiscal year, predicting growth of 3% to 5%, compared with the previous outlook of 3% to 4%. The company also said then that adjusted profits per share would rise 5% to 10% for the year, up from an increase of 4% to 9%.

The company is scheduled to hold an investor call covering the quarter starting at 8:30 a.m. ET Thursday.

SALES GROWTH: The maker of Tide laundry detergent, Pampers diapers and other staples delivered organic-sales growth of 7% for its quarter that ended Sept. 30, a performance that outpaced gains on that metric at other consumer-product companies. The question is whether P&G can maintain such a pace. The company, which sells its brands to mass merchants, pharmacy chains, club stores, groceries and other retailers, may have a bit of tailwind from consumer spending, which in December rose at a seasonally adjusted rate of 0.3% from the month earlier, according to the Commerce Department.

HIGH EXPECTATIONS: P&G's stronger quarterly results have bolstered its stock, with shares rising 39.4% over the last year, a stronger performance that the 24.3% gain from the S&P 500 (SPX) over that time, per FactSet. In a recent survey of 26 institutional investors conducted by Bernstein analysts, 70% of respondents said their initial responses to P&G as an investment were positive. That is a reversal from 2015, when 69% of respondents offered negative initial views about the company's potential. One challenge for Procter & Gamble is keeping up with these heightened expectations.

CLOSE SHAVE: Investors may also be looking for updates about the company's Gillette shaving business. Last summer, P&G recorded an $8 billion charge as it wrote down the value of that unit, which has faced intense competition from rivals that have focused on offering lower prices. But organic sales in the segment that includes Gillette, as well as the Braun and Venus shaving brands, rose 1% the previous quarter.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

January 22, 2020 09:18 ET (14:18 GMT)

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