Nestle's 2011 sales growth exceeds estimates
Updated: 2012-02-17 07:42
GENEVA - Nestle SA, the world's biggest food company, reported that last year's sales growth beat analysts' estimates and forecast higher earnings in 2012 as it introduces products such as the Nescafe Alegria coffee maker.
Sales rose 7.5 percent excluding acquisitions, disposals and currency shifts, the Vevey, Switzerland-based company said on Thursday in a statement. That beat the 7 percent average estimate of 12 analysts surveyed by Bloomberg. Nestle forecast higher underlying earnings per share at constant currencies in 2012.
Nestle has developed Maggi Juicy Roasting cooking aids and Dreyer's smoothies to counter weakening consumer sentiment in North America and Europe. The company has also passed on higher raw-material costs to consumers in the form of increased prices. Sales from its Americas unit gained 6.2 percent, helped by the introduction of products such as DiGiorno Pizza Combos.
"The figures look better than expected and there seems to be an acceleration in the Americas in the fourth quarter, which is a positive and indicative of an improved consumer mood," said Jon Cox, head of Swiss research at Kepler Capital Markets.
Nestle rose by 1.4 percent to 55.20 Swiss francs ($59.49) at 10:10 am in Zurich trading. The stock has gained 5.2 percent in the past 12 months.
Net income from continuing operations rose to 9.49 billion francs from 8.78 billion francs a year earlier, tempered by the strength of the Swiss currency, which reduced the value of sales generated in other countries.
"There are some bright spots in the US, but generally the North American economic environment will remain subdued," Chief Financial Officer Jim Singh said on a webcast. There will be a "slow but gradual improvement", he said.
Nestle said it expects so-called organic sales growth in 2012 to meet its target of 5 percent to 6 percent after beating that range in 2010 and 2011.