P&G meets on profits, but CFO says 'on right track'
Procter & Gamble posted higher quarterly profits that were in-line with expectations on Friday, as the world's largest household products maker benefited from some growth overseas, cost cuts, and a lower tax rate. Chief Financial Officer Jon Moeller told CNBC right after the release: "We're right on track."
The maker of Pampers diapers and Tide detergent also said it expects to see strong earnings growth in the second half of the year, with full-year adjusted earnings expected to rise 5 percent to 7 percent. "We're [also] able to reconfirm guidance for 3 to 4 percent organic sales growth on the fiscal year," Moeller said in a "Squawk Box" interview.
After the earnings announcement, the company's shares declined slightly in premarket trading. (Click here to get the latest quotes for P&G.) The stock has been around all-time highs.
P&G posted fiscal first-quarter earnings excluding items of $1.05 per share, down slightly from $1.06 a share in the year-earlier period. Revenue came in at $21.21 billion.
Analysts had expected the company to report earnings excluding items of $1.05 a share on $21.05 billion in revenue, according to a consensus estimate from Thomson Reuters.
"Organic sales growth came in at 4 percent" for the quarter, Moeller said. "We grew 8 percent in developing markets. We also grew in developed markets. The U.S., which is the largest consumer products market, we grew 2 percent. We grew 11 percent in Japan."
He said he has not seen a bottoming in Europe yet, "but it hasn't gotten much worse either. It seems to us to be going a bit sideways. So hopefully that turns positive soon."
Back in the spring, P&G brought its former boss A.G. Lafley out of retirement on an interim basis to lead an effort to streamline operations and boost shareholder value.
Moeller described what Lafley has been concentrating on since his return. "He's tightening our focus. He's ensuring that the consumer and the customer are at the center of everything we do. He's working with us to accelerate and exceed our productivity targets. And he's emphasizing consumer value and shareholder value as key deliverables."
Lafley succeeded embattled chief executive Bob McDonald—who had taken the reigns when Lafley retired. Hedge fund manager and major P&G investor Bill Ackman had been been pushing to remove McDonald, who had seen P&G stock rise 54 percent during his tenure but underperform the S&P 500 Index and some competitors.
So who's going to take over for Lafley when he eventually gives up the reigns? Moeller was cagey: "As A.G. [Lafley] said when he came back, we're going to be criteria driven, not time-driven on succession. We've got a very deep bench of talent."
Moeller did add, "I'm not raising my hand."