Procter & Gamble Skies Look Bright

The Procter & Gamble Company (NYSE: PG) shares are up some 15% from their lows in 2008 as successful price hikes helped preserve margins. Many investors are now watching the consumer goods manufacturer as commodity and energy prices begin to fall, which could prove to be a further boost to margins. So, should investors take a second look at this non-cyclical consumer goods company?

Last quarter, Procter & Gamble reported a 33% jump in profits thanks to higher prices and product improvements along with strong performance in developing markets like China and Russia. The consumer goods manufacturer earned $3.02 billion, or 92 cents per share, on revenues of $21.27 billion compared to analyst estimates of 78 cents per share on $21.05 billion in revenues.

Procter & Gamble has been raising prices to offset rising energy prices and raw material costs while also benefiting from a weaker dollar. Now, it appears as if the company will be facing a stronger dollar and weaker commodities environment. Fortunately, the lower commodity costs will have a nearer term benefit than the dollar's longer-term exporting liability.

Procter & Gamble also launched several promising new products that many are hoping will boost sales long-term. Products like Crest's tooth-whitening strips, Clairol's "Perfect 10" hair colorant, and Gillette Fusion brands have dramatically increased sales in the past and have a promising future. Meanwhile, 30% of the company's business now takes place in growing markets.

Procter & Gamble is focused on providing branded consumer goods sold in over 180 countires around the world through mass merchanisers, grocery stores, membership club stores, drug stores, and in high-frequency stores, the neighborhood stores, which serve customers in developing markets. Shares rose $0.37, or 0.53%, to $70.81 on the day.