Will procter and gamble be able to perform better in second half of 2015?

 On Tuesday January 27^th, Proctor & Gamble announced its second quarter results, in which it missed the analyst estimation in terms of both earnings and revenue second time consecutively. Its earnings per share declined by 8% to $1.06 because of exchange rate volatility

The revenue from organic rose by 2%. Furthermore, procter and gamble reduced its whole year forecast to imitate the foreign exchange negative impact on its profit and overall sales.

Moreover, in order to maintain its focus on some essential strategic brands, which is very encouraging the company has planned to strip off nearly 100 brands that are not performing up to the mark. Analysts believes that with less brands company will be able to focus more on their rapid growth and will generate more values and can be managed easily.

In its attempt to act on the plan, in July last year procter and gamble sold its Asian and American pet care business to Mars followed by the European pet care to Spectrum in December. Furthermore the company has planned to exchange its Duracell batteries business with Berkshire Hathway with Berkshire’s stake in the consumer giant company. During November 2014, procter and gamble enter into a contract to sell off its Camay & Zest soap to Unilever. Both these deals are most likely to take place this year.

However, these initiatives and other structural changes to enhance the growth are not yet translated into upper class development.

The American based company is functioning in a challenging atmosphere. As international market growth is slowing down, foreign exchange volatility, turbulence in various markets in Ukraine, Russia and Middle East, import restriction in different countries has made the situation challenging for the company. All these problems are probable to endure in the upcoming quarter too.

In order to counterbalance the currency headwinds the company has revised its prices in various countries due to which management believes the market share will go down. With almost 60% of business globally, currency volatility has already affected the second quarter sales by almost 5%.

Organic sales of the company grew by 2% during the 1^st half of 2015. However, substantial foreign currency impact, loss on market share because of increasing price and macroeconomic changes in different markets is still one of the biggest challenge from which the company has to deal with in second half of 2015.

Proctor & Gamble Co. (NYSE:PG) stock was trading at a price of $84.63 on Thursday 5^th March after an increase by 0.33%.