Between the three companies, P&G saw the greatest loss in profits at 49%. This has caused the company to project less profits for the current quarter and slice it's earnings projections for the year. Despite this news, P&G has said that they expect developing markets to increase it's growth. They also project that it's core sales, despite these troubles, will "remain in the range it set earlier this year, and rise 4% and 5%." While they do hold a positive outlook, that does not necessarily mean good news for it's stock holders. They can expect their full years earnings per stock to be down 20 to 30 cents. For people with a high stake in P&G, this can add up. However, the company attributes their loss due to the stronger dollar, and they don't expect any long term loss.
Kimberly-Clark had the second greatest loss in profits at 19 percent for the fourth quarter. Like P&G, the company has adjusted it's total stock outlook to about 10 cents less than originally projected. However, they only expect their growth for 2012 to be 1%. They plan to put more money into marketing, research, and development in order to bring demand up. Executive Tom Falk was quoted as saying, "We have a big increase expected in our strategic marketing, Hopefully, part of it will go to higher margins as well." Even though they suffered a loss, Kimberly-Clark is hoping to counteract this for the 2012 year and like P&G, they don't project any long term losses.
Colgate-Palmolive saw a 5.4% profit loss for the fourth quarter. However, the company's global outreach is expanding, and core sales grew the highest in the Latin America and Asian Markets. In the US, however, they found the profits fell by 11%. Like both Kimberly-Clark and P&G, the company expects the stronger US dollar to hurt earnings. However, the toothpaste giant is additionally having problems with "higher input prices." But they hope that advertising their new products such as Optic White and Sensitive Pro-Relief will offset profit loss for 2012.
On the other end of the spectrum, Clorox is facing strong sales for the second fiscal quarter. This comes after the company has been recovering from reduced sales after the economic downturn. Clorox claims that the gains were a result of price increases. As a result of this information, the company has increased their growth projections.
While the three companies that suffered losses are changing their projections, they emphasize that this is only the result of a stronger US dollar. They don't expect these losses to continue long term and they do expect their company to grow, if not domestically, internationally. Clorox, which has a strong US base, seems to expect this growth to continue, considering it has not been as affected by the stronger dollar.
Nice grasp on all the financial information! This will be helpful in later blogs and your paper.
ReplyDeleteThis post is really helpful and will be really great to use when considering our recommendations to the investors as they would appreciate knowing the successes and failures of the company financially. Also, I liked how you compared the companies with losses and gains.
ReplyDeleteI think how you included information about how these companies plan on recovering from theses losses is critical to helping us make a recommendation. The strategies that they choose to invest in to help them rebound from such significant losses, especially like that of P&G's, will definitely impact short-term and long-term future projections.
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