Earnings Decline at Unilever

By THE ASSOCIATED PRESS
Published: November 3, 2006
AMSTERDAM, Nov. 2 (AP) — Unilever, the producer of food and household products including Lipton tea and Dove soap, said Thursday that it earned 737 million euros ($942 million) in the third quarter as revenue increased 1.6 percent.

Profit was down 48 percent from 1.42 billion euros in the third quarter of 2005, when it recorded a one-time gain to account for the $800 million sale of its cosmetics division.

Revenue totaled 10.1 billion euros ($12.9 billion), helped by price increases and increased ice cream sales in Europe. The figures were at the top end of market forecasts, said Julian Lakin, an analyst at Mirabaud Securities.

Unilever, based in London and Rotterdam, also increased the number of shares it plans to buy back from investors, and the share price rose 3.5 percent Thursday in Amsterdam trading.

Profit margins were weaker as a result of higher advertising and promotion costs, and operating profit fell to 1.50 billion euros from 1.55 billion euros.

Unilever said that product introductions in Europe, including new AdeZ health drinks, Knorr bouillon cubes and Axe deodorants, had helped sales increase 3.5 percent.

“The U.K. has returned to growth, and France and Germany also performed better,” the company said. “The Netherlands continues to move ahead strongly and Russia is growing well.”

In the United States, Unilever said sales were up 3 percent, helped by growth in Bertolli frozen meals and Country Crock side dishes.

Together, the two regions represent more than two-thirds of Unilever sales.