Procter & Gamble to Take Big Charges Due to Venezuelan Currency Devaluation; Trims FY2013 Outlook (PG)

Procter & Gamble to Take Big Charges Due to Venezuelan Currency Devaluation; Trims FY2013 Outlook (PG)


In the latest fallout from the recent devaluation of Venezuelan currency, The Procter & Gamble Company (PG) announced late Thursday that it expects to take big, one-time charges to fight off losses from the devaluation. Also, P&G lowered its third quarter and fiscal-year 2013 guidance to reflect the new exchange rate.

The company said it will be take between $200 million to $275 million, or 7 cents to 9 cents per share, in one-time charges because of the devaluation by Venezuela’s government. The government has set a new rate of 6.30 bolivars to the dollar from the previous rate of 4.30 bolivars to the dollar in an attempt to reduce the amount of money it needs to borrow.

The devalued Venezuela currency impacts P&G because it affects functions like importing finished goods and raw materials.

Moreover, Procter & Gamble reduced its annual profit expectation to $3.94 to $4.04 per share from the previous estimate of $3.97 to $4.07 per share. Also, the company now expects third quarter EPS to be between 90 cents and 96 cents, down from the previous view of 91 cents to 97 cents..

According to analysts polled by FactSet, the company is expected to earn $4.07 per share in fiscal 2013 and 97 cents per share in the third quarter.

P&G shares were down 49 cents, or -0.64%, during pre-market trading on Friday. Over the past year the stock is up about +20%.

The Bottom Line
Shares of Procter & Gamble (PG) have a dividend yield of 2.93% based on last night’s closing price of $76.78 and the company’s annualized dividend payout of $2.25 per share.

The Procter & Gamble Company (PG) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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