Were Procter & Gamble's Results Enough To "Tide" Over Investors?

Procter & Gamble Co. PG reported results this morning that beat Wall Street estimates, but offered tepid growth going forward. The Cincinnati-based company reported earnings of 84 cents per share on $20.9 billion in revenues. Wall Street had been expecting earnings of 82 cents per share on $20.63 billion in revenues. For 2012, it expects to earn anywhere between $4.17 per share and $4.33 per share. Wall Street is at $4.26 per share, a penny above the mid-point guidance offered by Procter & Gamble. “We are pleased with the strong top- and bottom-line performance in the quarter,” said Chairman of the Board, President and Chief Executive Officer Bob McDonald. “We delivered organic sales growth of five percent and earnings per share growth of 18 percent in a challenging environment, driven by our ongoing commitment to make a difference in the everyday lives of the world's consumers.” For the next quarter, P&G expects sales growth to be six to nine percent, with organic sales growth of 2-4%. It expects earnings in the quarter to be $1.00-$1.04 per share, which would fall two percent from last year. For 2012, it expects sales to increase five to nine percent, and organic sales are estimated to grow three to six percent. As such, shares are up ~2%, as there is some short covering going on after the ECB announcement and on better than expected earnings out of P&G. Shares are trading at 14 times 2012 earnings, and sport a 3.5% dividend yield to boot. In times of economic uncertainty, a high dividend yield, stable, if unspectacular earnings, and a business that everyone needs on a day-to-day basis is nothing to sneeze at. Procter & Gamble may get you rich in a few years, but it has proven over time that its results are enough to "Tide" you over in the long term. ACTION ITEMS:

Bullish:
Traders who believe that the global economy will slow down but not come to a stalemate might want to consider the following trades:

• Consider consumer staples like Procter & Gamble, Clorox CLX, Colgate CL and others.

Bearish:
Traders who believe that the global economy will plunge may consider alternate positions:

• If the global economy does see another 2008 type scenario, not even consumer staples will be safe. Bonds will continue to see inflows. Traders can go long iShares Barclays 20+ Yr Treas.Bond ETF TLT.

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