Unilever ends 2016 with sales growth below estimates on India, Brazil
Consumer goods maker Unilever reported lower-than-expected fourth-quarter sales on Thursday, blaming the Indian government's withdrawal of high-value notes and a weak economy in Brazil.
The maker of Dove soap, Knorr soup and Marmite spread said those issues would continue to hurt results in the first part of the new year, helping to push the company's shares down 4.5 percent, its worst day in nearly a year.
The company said underlying sales rose 2.2 percent in the quarter. That compared with analysts' average expectation of 2.8 percent, according to a consensus compiled by the company, and growth of 3.2 percent in the third quarter and 4.7 percent in the first half.
Turnover was 13.1 billion euros ($14 billion) in the fourth quarter, up from 12.9 billion in the year-earlier period.
Results were ahead of expectations on second-half margins, earnings per share growth and free cash flow, but were overshadowed by the sales figure.
For the full year, sales growth was 3.7 percent, below the 3.9 percent analysts were expecting.
Looking ahead, Unilever is targeting growth in the range of 3 to 5 percent for 2017, but said results in the early part of the year would be below that, due to the ongoing issues in Brazil and India, and the timing of Easter.
"We do expect the first half and Q1 in particular to be slightly slower than that rate," Chief Financial Officer Graeme Pitkethly told Reuters.
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