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10
percent organic volume growth
for quarter and fiscal year
drives earnings
August
02, 2004.
The
Procter & Gamble Company
(NYSE:PG)
announced strong top and bottom-line
growth for the April – June
quarter
and the fiscal year. The company
delivered earnings per share
of
$0.50 for the quarter and $2.32
for the fiscal year, increases
of 16 and 14 percent, respectively,
versus prior year core earnings
per share for the comparable
periods.
Results were ahead of the company’s
long-term annual growth rate
targets
for sales, earnings per share
and cash flow.
Executive Summary
- Unit
volume
grew
18
percent
for
the
quarter
and
17
percent
for
the
fiscal
year.
Organic
volume,
which
excludes
the
impact
of
acquisitions
and
divestitures,
increased
10
percent
for
both
the
quarter
and
fiscal
year.
All
business
segments,
regions
and
each
of
the
company’s
top
14
brands
posted
volume
growth
on
the
quarter
and
fiscal
year.
- Net
sales
for
the
quarter
increased
19
percent
to
$12.96
billion.
For
the
fiscal
year,
sales
also
grew
19
percent
to
$51.41
billion,
crossing
the
$50
billion
threshold
for
the
first
time
in
company
history.
Organic
sales,
which
exclude
the
impacts
of
acquisitions
and
divestitures
and
foreign
exchange,
grew
eight
percent
for
both
the
quarter
and
fiscal
year.
- Diluted
net
earnings
per
share
increased
47
percent
for
the
quarter.
Compared
to
prior
year
core
results,
which
exclude
restructuring
program
charges
of
$261
million,
diluted
net
earnings
per
share
increased
16
percent.
- For
the
fiscal
year,
diluted
net
earnings
per
share
increased
25
percent.
Earnings
per
share
grew
14
percent
compared
to
prior
year
core
results,
which
exclude
restructuring
program
charges
of
$538
million.
“We delivered very strong results
for the quarter and fiscal year,
and we’re confident in our ability
to meet or exceed our long-term
growth targets going forward,” said
Chairman of the Board, President
and Chief Executive A. G. Lafley.
“This is the third consecutive year
of broad-based strength across businesses
and geographies, demonstrating the
power of focused strategies and
the sustained benefits of the systemic
and structural changes we made over
the past several years.”
April – June Quarter Discussion
Unit volume increased 18 percent
behind double-digit growth in beauty
care and health care and in developing
markets. Organic volume, which excludes
the impact of acquisitions and divestitures
from year-over-year comparisons,
increased 10 percent. Net sales
for the quarter increased 19 percent
to $12.96 billion. Organic sales
increased eight percent, well above
the company’s long-term annual target.
The impact of foreign exchange added
three percent to sales growth, primarily
driven by the strength of the euro,
British pound and Japanese yen.
The combination of pricing and mix
reduced sales by two percent.
Net earnings for the quarter increased
44 percent to $1.37 billion. Earnings
growth was primarily driven by volume,
restructuring program charges of
$261 million after tax in the base
period and gross margin expansion
enabled through cost savings programs.
These improvements were partially
offset by marketing investments
in new product initiatives and to
support continued growth of the
base business. Excluding prior year
restructuring program charges, net
earnings increased 13 percent.
Diluted net earnings per share
increased 47 percent to $0.50. Compared
to prior year core results, diluted
net earnings per share increased
16 percent. The acquisition of Wella
AG was slightly dilutive on the
quarter.
Key Financial Highlights
for the Quarter
- Gross
margin
expanded
280
basis
points,
with
150
basis
points
of
the
improvement
($168
million
before
tax)
related
to
restructuring
program
charges
in
the
base
period.
The
remaining
130
basis
points
of
the
expansion
were
driven
by
the
scale
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