A better view of P&G's results can be gained from Core earnings, which is a non-GAAP measure that excludes certain items and discontinued operations. In the December quarter, Core earnings per share rose from $1.10 to $1.13. Note that the December 2009 quarter included $1.5 billion in earnings from discontinued operations, primarily the pharmaceuticals business that P&G sold to Warner Chilcott (NASDAQ: WCRX).
This post examines P&G's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates. Reported earnings were $0.02 more than our $1.09 EPS estimate. (This small number masks some significant item-by-item differences.)
The principal sources for this income statement analysis were the earnings announcement and the ensuing conference call (transcript made available by Seeking Alpha).
In a second article, we will report P&G's scores as measured by the GCFR financial gauges. The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.
Before getting into the details, we will take a step back to introduce the subject of today's analysis.
Procter & Gamble creates and markets many well-known Household and Personal products to customers around the world. The company, based in Cincinnati, traces its roots back to 1837.
P&G reported Net Income of $12.7 billion ($10.9 billion from continuing operations) on Net Sales of $78.9 billion in fiscal 2010, which ended in June.
The company's market value is currently close to $200 billion on a fully diluted basis, which makes P&G one of the ten most-valuable U.S. corporations.