Nov. 5 (Bloomberg) -- Unilever said it cut prices as much as 3 percent compared with last year’s fourth quarter, more than some analysts expected, as the second-largest consumer-products maker stimulated demand from cash-strapped shoppers.

Chief Financial Officer Jim Lawrence said the company will report lower selling prices into the first half of 2010, given year-on-year comparisons. “We are now about where we should be” and don’t expect more price cuts, he said on a conference call following Unilever’s third-quarter earnings report today.

Unilever also said restructuring costs would be higher than anticipated because of the integration of Sanex and other soap brands it’s buying from Sara Lee Corp. “Don’t run ahead of yourselves” for Unilever’s fourth-quarter estimates, Chief Executive Officer Paul Polman told analysts on the call. Unilever fell 1.3 percent, erasing yesterday’s 0.2 percent gain.

“Despite a strong volume performance in the fourth quarter, pricing is a bigger negative than expected,” said Julian Hardwick, an analyst at Royal Bank of Scotland in London. “Expectations for underlying sales growth for the year will not increase.”

After taking the helm in January, Polman promised to stoke sales growth after Rotterdam- and London-based Unilever lagged behind P&G and Nestle SA for years. He cut prices, boosted advertising and accelerated the introduction of new products.

Unilever today reported a 0.2 percent decline for prices in the third quarter, its first quarterly drop in three years, as the quantity of goods sold increased by 3.6 percent.

Price Cuts

“The way we will report underlying price growth will show a negative impact of some 2 to 3 percent in the fourth quarter, and that’s going to persist into the next year,” Lawrence, the CFO, told journalists today. “You wouldn’t see that actually turn positive until the middle of next year.”

Andrew Wood, an analyst at Sanford C. Bernstein in London, had expected fourth-quarter prices to grow by 0.2 percent, according to a note released before the results.

Unilever shares fell 26 cents to 20.54 euros in Amsterdam.

The pricing outlook outweighed Unilever’s third-quarter profit and sales growth, which both beat analysts’ estimates. Net income slipped to 1.05 billion euros ($1.56 billion), above the average estimate of 997 million euros. So-called underlying sales, which excludes acquisitions and currency moves, rose 3.4 percent, above the 3 percent median of 13 analyst estimates in a Bloomberg News survey.

In September, Polman broke Unilever’s nine-year streak of avoiding major acquisitions by agreeing to buy Sara Lee’s personal-care and European detergent unit for 1.3 billion euros.

Lawrence today said the deal will require “additional restructuring” and not be complete before the middle of 2010. That will make Unilever’s total 2010 restructuring costs more than the previous forecast of between “50 and 100 basis points,” he said.

Lawrence referred to projected restructuring costs of 0.5 to 1 percent of 2010 revenue, spokesman Flip Dotsch said by e- mail today.

To contact the reporter on this story: Jeroen Molenaar in Amsterdam jmolenaar1@bloomberg.net

Last Updated: November 5, 2009 11:58 EST