Daily Management Review

Four American Giants Presented Financial Reports for 2015


01/26/2016


For the IV quarter of 2015, The American companies 3M and Procter & Gamble received a profit above market expectations. Johnson & Johnson reported an increase in profits as well, while DuPont, in contrast, recorded a loss.



Procter & Gamble

American Procter & Gamble Co. (P&G), the world's largest manufacturer of consumer goods, reduced revenue for the second fiscal quarter ended December 31. It was the sixth consecutive quarter on the stronger dollar and following lower demand for the company's products. P&G’s net profit has exceeded market expectations by reducing costs.

The cost of stocks of P&G's increased by 1.4% during preliminary bidding in New York.

P&G's net profit recorded for October-December 2015 increased to $ 3.21 billion, or $ 1.12 per share, compared with $ 2.37 billion, or $ 0.82 per share, in the same period a year earlier, the concern’s report says. P&G's profit, excluding one-off items, amounted to $ 1.04 per share.

The company's revenue in the last quarter decreased by 8.5% to $ 16.92 billion, forex losses worsened the trend by 9 percentage points. The company gets about two-thirds of revenues outside of North America.

Experts Polled by Thomson Reuters forecasted an adjusted profit of P&G at $ 0.98 per share on revenue of $ 16.94 billion.

P&G’s management has promised a return to revenue growth in the last fiscal quarter, but the general trend remains negative. However, organic sales growth of P&G (purified from the effects of mergers and acquisitions, divestitures and exchange rate fluctuations) was 2%. The increase in prices in all segments offset the decline in sales volumes.

The company expects that in 2016 financial year, adverse currency fluctuations will worsen revenue growth by 7 percentage points (previously expected 5.6 percentage points), and adjusted profit – by $ 0.37 per share instead of $ 0.11 per share declared in October.

Procter & Gamble has nearly 300 brands in more than 160 countries. The total annual turnover is more than $ 68 billion.

The company’s main activities - production of consumer goods in the following basic categories: cosmetics and perfumes, personal care, household products, health products, facilities for childcare, as well as animal feed. Among the company's brands are counted Pampers, Tide, Ariel, Always, Pantene, Mach3, Pringles, Lenor, Oral-B, Duracell, Olay, Head & Shoulders, Wella, Gillette, Braun.

Johnson & Johnson

The net profit of US Johnson & Johnson (J&J), the world's largest manufacturer of medical products, has increased in the IV quarter of 2015, while revenue declined.

J&J’s net profit in October-December was $ 3.22 billion, or $ 1.15 per share, compared with $ 2.52 billion, or $ 0.89 per share, a year earlier.

J&J's profit excluding one-off items increased during the quarter to $ 1.44 per share. At the same time, the company's revenue declined by 2.4% to $ 17.81 billion.

Experts polled by Thomson Reuters forecasted an average adjusted profit at $ 1.42 per share on revenue of $ 17.88 billion.

Sales of pharmaceutical units increased by 0.8 % in the IV quarter - to $ 8.06 billion. Medical devices and diagnostic equipment division reduced revenue by 3.3% - to $ 6.43 billion; consumer health goods production department reduced revenue by 7.9% - to $ 3.32 billion.

At the end of 2015, J&J’s net profit fell 5.6% to $ 15.41 billion, or $ 6.2 per share, with a decrease in revenues by 5.7% to $ 70.07 billion.

For 2016, management expects that the company’s profit will be $ 6,43-6,58 per share. On average, analysts forecast profit of $ 6.38 per share.

The cost of J&J shares fell by 0.4% during preliminary bidding. Over the past three months, the company's capitalization decreased by 3.5%, while the Dow Jones Industrial Average fell by 9.4% over this period.

Last week, J&J announced its intention to dismiss 3 thousand employees at division, which produces medical devices, thus reducing the company's staff of 2.5%.

3M

The American innovation and a diversified industrial company 3M Co. received a profit above market expectations in the IV quarter.

Net profit in October-December was $ 1.04 billion, or $ 1.66 per share, compared with $ 1.18 billion, or $ 1.81 per share a year earlier. Adjusted earnings per share were $ 1.80, while analysts expected $ 1.63 per share.

3M's revenue was $ 7.298 billion - lower than in the same period of 2014 ($ 7.72 billion), but above the forecast ($ 7.21 billion).

The company maintained its forecast for 2016, and expects earnings of $ 8,10-8,45 per share.

DuPont

According to the results of IV quarter, US DuPont, one of the largest chemical companies in the world, recorded a loss of $ 253 million, or $ 0.29 per share, compared with earnings of $ 683 million, or $ 0.74 per share, a year earlier. The company's profit, excluding one-off items declined from $ 0.57 per share to $ 0.27 per share.

Revenue for the IV quarter was $ 5.3 billion, which is 9% lower than for the same period in 2014.

At the end of 2015, net profit of DuPont fell almost twofold, to $ 1.959 billion compared to $ 3.636 billion in 2014.

The company's revenues in 2015 decreased by 12% compared with the previous year, reaching $ 25.13 billion.

In 2016, the company expects earnings of $ 2.95-3.10 per share. Average forecast profit made by analysts is $ 1.31 per share.

The company expects the current difficult global economic conditions in agriculture and slowing growth in emerging markets to continue, what will negatively affect the company's sales in 2016.

DuPont, based in the United States in 1802, operates in 90 countries around the world. The company produces specialty chemicals, offers products and services for agriculture, food production, electronics, communications, safety and protection, construction, transport and light industry.

source: bloomberg.com






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