P&G Beats Estimates

  • August 1, 2005
  • Brice Wightman

Economic Data
Likely To Attract Some Attention As The Pace of Earnings Slows

(RealTimeTraders.com)  With
traders cashing in on some of the market’s recent gains, the major averages
closed notably lower on Friday. With the downward move, the Nasdaq and the
S&P 500 pulled back off the four-year closing highs that they set on
Thursday.

Despite the loss on Friday, the major averages posted strong gains for the month
of July. The Nasdaq turned in a particularly strong performance, with the
tech-heavy index rising 6.2 percent over the course of the month, while the Dow
and the S&P 500 both closed up 3.6 percent.

In recent sessions, positive earnings news has contributed to the strength in
the broader markets, as traders express optimism about the markets’ ability to
sustain their recent upward move.

Nonetheless, with the pace of earnings season starting to slow down, traders are
likely to keep a close eye on a slew of economic data that is due to be released
this week.

The Institute for Supply Management will start the flow of economic reports with
the release of its report on manufacturing activity in the month of July on
Monday. Economists expect the report to show that the manufacturing index rose
to 54.5 in July from 53.8 in June.

At the same time, the Commerce Dept. is due to release its report on
construction spending in the month of June. The report is expected to show that
construction spending rebounded by 0.5 percent in June after falling 0.9 percent
in May.

Later in the week, traders will also digest reports on personal spending and
activity in the service sector, with many looking ahead of the release of the
Labor Dept.’s July employment report on Friday.

Economists currently expect the employment report to show that the U.S. economy
added 175,000 jobs in July following a smaller than expected increase of 146,000
in June. The report is also expected to show that the unemployment rate remained
at 5.0 percent.

The economic reports may attract more attention than usual, as traders dissect
the data, looking for indications of what the Federal Reserve will say at its
meeting next Tuesday.

P&G Reports
Q4 Earnings That Beat Analyst Estimates

Earnings are still likely to have a
significant impact on the markets, however, with the release of earnings from
Procter & Gamble (PG) attracting some attention in pre-market trading on
Monday. The consumer products giant reported fourth quarter earnings that rose
year-over-year and came in above analyst estimates.

P&G reported net earnings for the quarter that rose to $1.5 billion or $0.56
per share compared to $1.37 billion or $0.50 per share in the same quarter last
year. The company said earnings growth was primarily driven by volume and
pricing and partially offset by higher commodity costs.

The company also said sales rose 10 percent to $14.26 billion from $12.96
billion in the year ago quarter. P&G added that unit volume for the quarter
rose 6 percent year-over-year.

Wall Street analysts had expected P&G to earn $0.55 per share on revenues of
$14.05 billion.

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