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Friday, 21 April 2017

Unilever first-quarter sales top expectations

Chief financial officer Graeme Pitkethly told Reuters that performance in the second half of the year should be better than in the first half, and expressed optimism about the global economy.

Chief financial officer Graeme Pitkethly told Reuters that performance in the second half of the year should be better than in the first half, and expressed optimism about the global economy.

LONDON: Consumer goods maker Unilever reported a surprise acceleration in quarterly sales, helped by price increases.

The results could boost investor enthusiasm for the maker of Dove soap and Knorr soups, whose shares have gained since February when it swiftly rejected a US$143bil takeover offer from rival Kraft Heinz, which prompted it to undertake a wide-ranging review of its business.

It announced the review’s results earlier this month.

Chief financial officer Graeme Pitkethly told Reuters that performance in the second half of the year should be better than in the first half, and expressed optimism about the global economy.

“We are seeing positive signs in the economy overall,” Pitkethly said, talking about a “bottoming out” of currency devaluations in large emerging markets that are key for Unilever including India, Indonesia and Brazil.

Unilever said underlying sales rose 2.9% in its financial first quarter.

That compares to analysts’ estimates of 2%, according to a consensus compiled by the company, and growth of 2.2% in the fourth quarter and 3.2% in the third quarter of the last financial year.

The sales gain was due entirely to price increases, with the amount of goods sold falling 0.1%. Excluding the struggling margarine and spreads business, which Unilever plans to sell by the end of the year, underlying sales rose 3.4%.

Turnover rose 6.1% to 13.3 billion euros (US$14bil), including a foreign exchange boost of 2.4%.

Looking ahead, Unilever reiterated the forecast it gave earlier this month, saying it was on track for sales to grow 3% to 5% this year, with margin improvement of at least 80 basis points and a dividend increase of 12%. – Reuters

Tags / Keywords: Stocks , Earnings , Unilever , earnings

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