Unilever 4th quarter profit rises 15pc
Unilever NV, maker of consumer products such as Dove soaps, Lipton teas and Ben & Jerry's ice cream, said Thursday its fourth quarter earnings rose 15 percent on strong sales growth in emerging markets -- though margins suffered slightly from rising commodity costs.
Net profit was €955 million ($1.32 billion), up from €831 million. Sales rose 12 percent to €10.8 billion.
The world's third-largest consumer products maker said underlying margins slipped by 0.2 percent, as it was unable to fully pass on rising commodities costs to consumers. With sales prices flat, increased raw materials costs outweighed savings from restructuring and cuts on advertising.
The company's earnings gains came "despite the intense competition and the return of commodity cost volatility," said Chief Executive Paul Polman. He noted consumer confidence remains low in "many markets."
Shares rose 0.7 percent to euro22.255 in early Amsterdam trading.
"Unilever's Q4 results saw sales growth come in above the top of the range of expectations," said analyst Graham Jones at Panmure Gordon & Co. in a note on the earnings.
He said the fall in margins "will be an issue for skeptics" but the most important thing was Polman's statement that the company can win market share and improve its margins in the medium term.
"While the trading environment is undoubtedly tough...we believe Unilever is well placed to withstand the pressures, and as such believe the shares present an excellent buying opportunity," he said.
In a less upbeat comment, Britain's Investec Bank said it will likely adjust its forecasts for the company's shares performance downward.
"With Unilever struggling for margin in the face of what we think are only the foothills of input cost inflation, we expect even bigger challenges when it faces the peaks to come" later this year, the bank's analysts said in a post-earnings note.
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