Procter & Gamble Q2 Earnings: Efficient Supply Chain, Price Hikes May Fuel Sales

 | Jan 18, 2022 08:46

  • Reports Q2 2022 results on Wednesday, Jan. 19, before the market opens
  • Revenue Expectation: $20.34 billion
  • EPS Expectation: $1.66

    • When Procter & Gamble (NYSE:PG) reports its latest earnings tomorrow morning, investors will focus on the consumer product giant’s ability to keep its global markets well supplied when the Omicron variant of the COVID virus is compounding supply-chain disruptions.

    From furniture makers to grocers, the world’s biggest companies are using their deep pockets, sprawling global operations, and commanding market share, to insulate themselves from the global supply-chain meltdown.

    Still, the impact of the lingering supply-chain obstacles can’t be completely avoided. P&G expects $2.3 billion in after-tax expenses this fiscal year—an increase from the prior expectation of $1.9 billion—due to cost escalations from elevated commodity and freight prices.

    “We experienced the full impact of rising commodity and transportation costs this quarter,” Chief Financial Officer André Schulten said on a conference call in October.

    P&G, however, is in a good position to insulate itself from these bottlenecks due to its ability to raise prices and to spend on supply-chain fixes. The Cincinnati-based P&G, which among a host of other recognizable supermarket staples makes Tide detergent and Crest toothpaste, has started to charge more for razors and certain beauty and oral-care products. These price hikes come in addition to earlier moves to start charging more for an array of household necessities from diapers to toilet paper.

    h2 Stock Near Record High/h2

    That's perhaps the main reason investors have ignored supply headwinds when it comes to Procter & Gamble. Its shares hit a record high early this month, after gaining about 11% in the past three months.

    The stock closed on Friday at $159.81; US markets were closed on Monday for a holiday.