Monday 19 February 2018

Nestle shares fall even as profits beat expectations


Peter Flanagan

SHARES in Nestle slipped back yesterday, despite the food giant reporting strong profits for the first half of the year and forecasting higher revenues for the next six months.

Net income at the world's biggest food company showed earnings fell to CHF4.7bn (€4.5bn), mainly due to the sale of its stake in Alcon. The group recorded revenue of CHF41bn.

The strength of the Swiss franc and higher raw-material costs also hit the company's bottom line. Profits were higher than the CHF4.61bn anticipated by analysts though.

Nestle said it expected higher prices to have "a fuller impact" in the second half, but also said margins would increase as the price hikes in raw materials were passed on to consumers.

Nestle accelerated price increases in the second quarter to offset soaring costs for commodities such as coffee, cocoa and sugar.

Analysts in general were positive on Nestle's numbers and commentary.

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