Procter & Gamble (NYSE: PG) reported its Q4 and full-year results on Tuesday. The numbers looked very good to me (save for one, which I'll get to). P&G was up over 3% on Tuesday. Granted, the Dow saw one heck of a rally yesterday, but even so, P&G deserved a bid just due to its blue-chip corporate performance.

Revenues for the quarter increased 10%, and adjusted earnings per diluted share jumped over 19% to $0.80. For the year, revenues increased 9% and adjusted earnings per diluted share rose 15% to $3.50. As I stated in my earnings preview from the other day, Wall Street was looking for adjusted earnings to be around $0.78 per share. So P&G beat by two pennies.

Of course, the earnings beat is nice, but cash flow is even nicer. In fact, management likes to evaluate itself by comparing its free cash flow to net earnings. P&G would like the so-called "free cash flow productivity" metric to equal at least 90%. Well, shareholders need not worry, since productivity in these terms was 96% for the quarter and 106% for the fiscal year. Free cash flow for the year expanded by 21%, and it was more than enough to power P&G's great dividend.

Now, the one fly in the ointment is the company's gross margin. That declined 160 basis points during the quarter and 70 basis points during the year. Can't get around inflation. The company was able to keep the operating and net margins at healthier levels, however. Price increases helped to offset input costs. And given that organic volume increased 4% during the quarter and 5% during the year, P&G seems to be managing things as well as can be expected. Another positive is that management seems satisfied that the Gillette integration is working out as planned.

Inflation will be a problem going forward, as it will be for similar consumer-products concerns such as Kimberly-Clark (NYSE: KMB), Colgate-Palmolive (NYSE: CL), Unilever (NYSE: UL), and Clorox (NYSE: CLX), but P&G is definitely in a solid position since it has a deep, valuable product portfolio that consumers buy every single day. I'm not worried about P&G. It will thrive over the long term, and it should be a good investment.

Disclosure: I don't own any company mentioned; positions can change at any time.