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Procter & Gamble (PG) Reports In-Line Q1 EPS; To Spin-Off Duracell

October 24, 2014 7:36 AM EDT

Procter & Gamble (NYSE: PG) reported Q1 EPS of $1.07, in-line with the analyst estimate of $1.07. Revenue for the quarter came in at $20.8 billion versus the consensus estimate of $20.83 billion.

P&G reiterated its organic sales growth and core earnings per share growth guidance ranges for fiscal year 2015. The Company continues to expect organic sales growth in the low-to-mid single digit range. P&G maintained its outlook for core earnings per share growth in the range of mid-single digits.

Consistent with its plans to focus and strengthen its brand and category portfolio, P&G announced its intention today to exit the Duracell personal power business by creating a stand-alone Duracell company. P&G said its goals in the process of exiting this business are to maximize value to P&G’s shareholders and minimize earnings per share dilution.

P&G said it is exiting the battery business in two steps. The first step was finalizing an agreement to sell its interest in a China-based battery joint venture, which it accomplished in late-August. Terms of this transaction were not disclosed.

The second step is the exit of the Duracell business. Although no decision has been made on the form of the exit, P&G’s current preference is a split-off of the Duracell business into a stand-alone company.

In a split-off, P&G shareholders would be given the option of exchanging some, none, or all of their P&G shares for shares in the newly formed Duracell company. P&G’s outstanding share count would be reduced by the number of P&G shares exchanged. The exact exchange ratio would be set just prior to the completion of the transaction, which P&G expects would occur in the second half of calendar year 2015.

“P&G’s first quarter results were in-line with our expectations, despite a very difficult operating environment,” said Chairman, President, and Chief Executive Officer A.G. Lafley. “This keeps us on-track to deliver our fiscal year commitments.”

“We continue to accelerate and increase productivity savings, sharpen our strategies and strengthen our portfolio by focusing on our biggest opportunities. The pet care divestiture and exit of the battery business will allow us to further focus these efforts.”

For earnings history and earnings-related data on Procter & Gamble (PG) click here.



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