Shares in Nestle climbed this morning (7 August) despite lower half-year profits after the company’s second-quarter sales beat analyst expectations and it announced a share buyback.
Nestle reported net profit of CHF4.85bn (US$5.34bn) for the six months to the end of June, down from CHF5.33bn a year earlier.
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The food giant reported operating profit of CHF6.2bn, against CHF6.74bn in the first half of 2013. Trading operating profit, which excludes items including impairment costs, was CHF6.44bn, versus CHF6.81bn. Nestle noted some pressure from input costs, notably in dairy.
On a reported basis, sales fell 4.8% to CHF42.98bn. However, Nestle’s top line was affected by the strength of the Swiss franc. On an organic basis, Nestle’s sales were up 4.7%. In the second quarter, Nestle’s underlying sales growth accelerated, with sales increasing 5.1% on an organic basis, beating the consensus forecast among analysts of a 4.7% increase.
Over the first half, Nestle saw sales rise on an organic basis in each of its regions.
The company confirmed its forecasts for organic sales to increase “around 5%” and for “improvements in margins, underlying earnings per share in constant currencies and capital efficiency”.
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By GlobalDataNestle, meanwhile, announced a share buyback programme worth CHF8bn.
Shares in Nestle were up 2.98% at CHF69.10 at 10:15 CET.
Click here for a round-up of what analysts thought of the results.
