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The fiscal second quarter results from Dow component Procter & Gamble (PG 125.11, -0.46, -0.4%) were released today. They contained quite a bit of good news, but with revenue coming up shy of consensus expectations, PG provided investors an excuse to trim some of the huge gains that have been logged by the stock since mid-2018.

Briefly, PG reported core net earnings of $1.42 per diluted share, which exceeded analysts' average estimate, on a 4.6% increase in net sales of $18.24 billion.

The key takeaways from the second quarter report included the following:

• There was solid organic sales growth of 5%, driven by increases in all categories and bolstered by increases in volume (3%), price (1%), and mix (1%). Beauty led the way with 8% organic sales growth. 
• PG kept costs in check and benefited from improved productivity. Core gross margins increased by 200 basis points to 51.6%. Productivity cost savings drove a 190 basis points improvement in its core operating margin of 24.7%.
• PG raised its FY20 outlook.
  • All-in sales growth was boosted from a range of 3-5% to a range of 4-5%. Guidance for organic sales growth was increased from 3-5% to a range of 4-5%.
  • Core EPS growth is expected to increase 8-11% versus prior guidance of 5-10%.
  • PG expects to pay over $7.5 billion in dividends and repurchase $7-8 billion of common stock versus prior guidance of over $7.5 billion in dividends and $6-8 billion in repurchases.

At its current price, which is up nearly 80% from its 2018 low, PG trades at 24.5x forward twelve-month earnings. That is an 18% premium to its five-year average, according to FactSet data.

The company is executing well, yet it faces some valuation headwinds in a market where valuation concerns are becoming more prominent. That consideration, combined with the revenue miss in the second quarter, and the ongoing struggles of foreign economies that account for close to 60% of PG's revenue, have likely curtailed investors' enthusiasm for an otherwise good earnings report.