wall-street journal

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2 articles to be used in conjunction with each other:

This is an interesting combination of articles as one company is weathering the storm of industry and the other is not.  How can Colgate take a play from P&G’s playbook and grow?

article 1: Colgate-Palmoliveshares had their biggest one-day drop since July 2010 after the consumer products company said fourth-quarter sales missed analysts’ estimates and cautioned that global uncertainty and currency issues would remain a challenge this year.
The New York-based company behind Colgate toothpaste and Brite detergent said sales fell 4.5 per cent year on year to $3.7bn, missing analysts’ estimates of $3.9bn, as the strength of the US dollar and India’s demonetisation scheme dragged on results. Revenues declined in Latin America, Europe, Asia Pacific and Africa but were unchanged in North America.
Organic net sales, which exclude the impact of foreign exchange, acquisitions and the deconsolidation of its operations in Venezuela, grew 1.5 per cent. Nevertheless, that still came in shy of the 4.7 per cent figure that Wall Street was looking for and was the weakest pace of growth since the first quarter of 2011, with Mark Astrachan, an analyst at Stifel, calling it “the biggest sales miss in recent memory”.
The news sent Colgate shares down 5.2 per cent to $64.68 on Friday, leaving it among the biggest decliners on the S&P 500.
However, Colgate did swing to a profit of $606m, or 68 cents a share, in the three months ended in December, compared with a loss of $458m, or 51 cents a share, in the year-ago period. Adjusting for one-time items, earnings of 75 cents a share were in line with estimates.
Looking ahead the company said “uncertainty in global markets and foreign exchange volatility” remained a challenge and it expected low single-digit net sales and earnings per share growth in 2017.
The sell-off in Colgate shares accompanied modest declines in the broader US stock market. At the close of trade, the S&P 500 was down 0.1 per cent to 2,294.6, the Dow Jones Industrial Average was flat at 20,093.7, while the Nasdaq Composite gained 0.1 per cent to 5,660.7.
It was a softer tone that contrasted the strong gains made in the first days after President Donald Trump took office and revived growth expectations through actions deemed broadly positive for the US economy by investors.
Chevronreported earnings well below expectations, suffering a fall in profits from its refineries. Its stock price gave up 2.4 per cent to $113.79.
Earnings per share were 22 cents for the quarter, compared with an average forecast of 64 cents. The company reported a loss of 31 cents per share for the fourth quarter of 2015, hit by a writedown in asset values.
Revenues for the fourth quarter of 2016 were also less than expected at $31.5bn, up 8 per cent from the equivalent period a year earlier.
John Watson, chief executive, said in a statement that Chevron’s 2016 results had been affected by low oil and gas prices, but the company had “responded aggressively” by cutting capital spending and operating costs.
The fall accompanied a broader decline among energy companies, as the price of Brent crude dropped 1.3 per cent to $55.52. The S&P 500 energy sector stood as the worst performer in the index, down 0.9 per cent.

 
Article 2: Procter & Gamble Co. snapped out of a long funk, booking its strongest quarterly sales gains in five years on the back of healthy global demand for bathroom staples like Head & Shoulders shampoo and Gillette razors.
The gains were a signal that the consumer products giant may be entering a period of more robust growth after a yearslong struggle to adapt to rising competition, higher costs and a consumer shift toward smaller brands. P&G’s woes led to the costliest board fight in history and promises by executives of dramatic changes, but there were few signs that the moves were taking hold.
Investors cheered the results on Friday, sending P&G shares up 8.3% to $87 — its highest percentage gain in a decade. The shares are still down on the year, having missed out on the broader stock market rally.
The Cincinnati-based company reported sales increases across most of its categories, including shaving razors, health care and laundry detergent. P&G executives said the growth came from increased demand in the U.S. and abroad, not the company’s recent decision to increase prices on some items.
Despite the strong start to its fiscal year, executives sought to tamp down expectations and stuck with their full-year forecast for organic sales to rise 2% to 3%. Jon Moeller, P&G’s finance chief, said he would refrain from calling it a “breakout quarter.”
The company is “certainly not sitting here today declaring victory,” Mr. Moeller said on a conference call with analysts. “There’s a lot of work and volatility ahead of us.”
P&G said organic sales, a closely watched metric that strips out currency moves, acquisitions and divestitures, rose 4% in the fiscal first quarter. Beauty products — with brands including Pantene, Olay and Old Spice — fueled the gains, rising 7%. Overall, organic sales increased in nine of the company’s 10 global categories, Mr. Moeller said in an interview.
“Beauty had a very good quarter, but the story is not beauty,” he said. “If you look at the difference between the prior quarters and this quarter, the most defining difference was simply the number of businesses that were growing, and that reflects the implementation of our strategy.”
The company has been working on productivity, making better packaging and creating more products that solve consumers’ problems and are convenient, Mr. Moeller said. Some of the company’s fast-growing products in the quarter were Tide Pods detergent and Always Discreet, an adult diaper targeted at women with sensitive bladders launched in 2014, he said.
Mr. Moeller said the company raised prices in some emerging markets to offset currency swings but that overall prices were neutral in the September quarter. Shipment volumes rose 3% from a year ago.
The company now estimates overall sales to be down 2% for the full year due to foreign-exchange headwinds, compared with the previous outlook of flat to up 1%.
In recent quarters, the company’s organic sales have generally risen 2% or less. They rose 1% in the fiscal year ended June 30, below the company’s goal of 2% to 3%.
After more than a year of trying to combat weak demand by lowering prices, P&G recently changed course, saying it would charge more for its Pampers, Bounty, Charmin and Puffs brands. The increases, which the company said would take effect later this year or in early 2019, have the potential to more broadly influence pricing and demand given P&G’s size and clout. P&G said pricing overall was neutral during the quarter.
P&G posted a 4% gain in organic sales in its long troubled grooming business, where Gillette has lost market share to online upstarts like Dollar Shave Club. Grooming sales in the U.S. grew 10% in the quarter, though Mr. Moeller cautioned that the company will still continue to face challenges in the business. The only P&G segment that reported a decline in organic sales was the baby business, which includes Pampers and Luvs diapers.
Consumer-products makers got a boost this week when Unilever PLC and Nestlé SA said inflation in many markets allowed them to charge more for their products, fueling stronger sales for those companies in the latest quarter. Many consumer-goods makers in recent quarters have struggled to raise prices amid weak inflation, but commodity-price increases and a stronger U.S. dollar have changed that.
P&G said profit rose 12% to $3.2 billion, or $1.22 cents a share, in the first quarter, which ended Sept. 30. Core earnings were $1.12 a share, beating the $1.09 a share analysts polled by Refinitiv were looking for.
Net sales rose 0.2% to $16.69 billion.
The company’s earnings were affected by unfavorable foreign-exchange fluctuations due to the strengthening of the U.S. dollar, which hurt sales by 3%.
P&G said price increases to offset foreign-exchange and commodity pressures will begin to go into effect later in the fiscal second quarter and pick up in the second half of the year. The cost and foreign-exchange challenges “will persist and likely worsen” as the company moves into the second quarter, Mr. Moeller said.
The price increases may negatively affect overall consumption, Mr. Moeller said. “We will simply have to adjust as we go on, as we learn,” he said.
The company also maintained its expectation for core earnings-per-share growth of 3% to 8% for fiscal 2019, although Mr. Moeller said the company isn’t currently at the high end of this range. The outlook includes an estimated $1.3 billion headwind from foreign exchange and higher commodity costs, such as crude oil, as well as higher transportation costs.

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