Unilever Profits Decline 17%

Stock quotes in this article: UL , UN , PG  

Updated from 2:30 a.m. EDT

LONDON (TheStreet) - Consumer products maker Unilever(UL) said margins slipped and second-quarter earnings fell 17% to 758 million euros ($1.09 billion) even as it saw volume growth across its operations.

Revenue in the period rose 1% to 10.46 billion euros, with underlying sales growth of 4.1% and volume growth of 2%, Unilever said in a statement Thursday.

Sales were in line with analysts' expectations, but profit was slightly below.

"While conditions remain difficult in many markets, I am encouraged by the return to volume growth across all regions and the majority of countries and categories," said CEO Paul Polman in a statement. "More of our brands are improving share again behind strong innovations, greater consumer value, increased marketing support and better execution. We continue to focus on restoring volume growth while protecting margins and cash flow for the year as a whole."

Unilever didn't specify why its margins slid, but noted it had spent more money on advertisements and suffered from higher commodity costs. Profits also were hit by 77 million euros more in pension-related costs than a year earlier.

Sales rose 6.6% in Asia and Africa, now Unilever's largest market, 0.6% in the Americas, but fell 5.1% in Western Europe. Operating profits were up by 18% in Asia, but fell by 1% in the Americas and 24% in Western Europe.

Unilever is the maker of Lipton teas, Bertolli pastas and Dove soaps.

The world's biggest consumer-products company, Procter & Gamble(PG), said Wednesday fiscal fourth-quarter earnings fell 18% to $2.47 billion, or 80 cents a share, as sales fell 11% and volumes declined 5%.

-- Reported by Joseph Woelfel in New York .

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