Unilever, the world’s second- biggest consumer-goods company, reported first-quarter sales that missed estimates and said profitability will drop in the first half, prompting the biggest stock decline in more than eight months.
Underlying sales growth, which excludes the effect of acquisitions, disposals and currency fluctuations, was 4.3 percent, Unilever said today. “The group’s outlook statements underscore the uncertainties regarding its margin performance this year,” Richard Withagen<http://topics.bloomberg.com/richard-withagen/>, an analyst at SNS Securities in Amsterdam, wrote in a note today. “Margin pressure will be more intense, while price increases will result in lower volume growth.” Commodity cost volatility is “unprecedented” this year, Chief Financial Officer Jean-Marc Huet said today on a conference call with journalists. Crude oil has risen to about $125 a barrel from about $100 since the company’s annual results, he said, particularly affecting the company’s health and personal-care business. Increasing costs of edible oils including palm oil <http://topics.bloomberg.com/palm-oil/> are also hurting the spreads business, he said.
