July 26 (Bloomberg) -- Unilever, the world’s second-biggest consumer-goods maker, reported second-quarter sales that beat analysts’ estimates as growth of personal-care products in Asia helped offset declines in Europe.
Underlying revenue rose 5.8 percent in the second quarter, the maker of Flora spreads said today in a statement. That topped the average estimate of 32 analysts surveyed by the company for a 4.8 percent increase. Underlying volume growth was 2.2 percent, slower than the 2.4 percent forecast by analysts, as the company sold 2.4 percent less food.
Unilever, based in London and Rotterdam, is among consumer-goods companies grappling with recession-wracked economies across southern Europe and the U.K. French yogurt maker Danone and Procter & Gamble Co. the world’s biggest consumer-products maker, both cut their full-year profit forecasts last month. To counter weakening developed markets, Unilever has introduced products such as Magnum ice cream bars and Clear shampoo in faster-growing emerging countries including China and Pakistan.
“Looking forward, we expect continued volatility, especially in commodity costs and economic conditions,” Chief Executive Officer Paul Polman said in the statement. The company remains “on track to deliver a modest improvement in core operating margin” this year.
Unilever shares rose as much as 4.3 percent to 27.60 euros in Amsterdam trading. The stock is up 3.8 percent this year, while P&G shares have tumbled 4 percent in that period.
Polman wants to double sales by expanding in its developing markets, outside of the Americas and Europe, where underlying sales rose 10.7 percent in the quarter as Europe struggles. European underlying sales declined 2.2 percent in the period. In contrast, Unilever’s Indian unit, which makes up about 5 percent of revenue, doubled net income and boosted sales 14 percent in its first quarter, sending its shares soaring on July 24 to the highest level since Bloomberg started compiling data in 1991.
“We were expecting Europe to be weak, but this is a little worse than we were expecting,” Warren Ackerman, an analyst at Societe Generale, said today.
Underlying sales growth excludes the effect of acquisitions, disposals and currency fluctuations. Unilever’s core operating margin, a measure of profitability, was unchanged. Analysts had expected it to narrow by 20 basis points.
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