Nestle Net Profit Declines; Won't Renew L'Oreal Shareholder Pact -- Earnings Review
February 15 2018 - 4:21AM
Dow Jones News
By Anthony Shevlin
Nestle SA (NESN.EB) said Thursday its 2017 earnings were hit by
an impairment charge. Organic sales growth slowed, particularly in
the fourth quarter. The company is keeping its options open
regarding its L'Oreal SA (OR.FR) stake, ending a pact with the
French company's largest shareholder.
SALES: Nestle posted a 0.4% rise in sales to 89.8 billion Swiss
francs ($96.3 billion), below analyst expectations of CHF90.02
billion. Nestle said North America and Brazil markets were
challenging environments and hampered sales growth.
EARNINGS: Nestle's net profit was CHF7.2 billion compared with
CHF8.53 billion a year earlier, and well under consensus of CHF9.72
billion. The Swiss company said net profit was hit by a charge
mainly related to a goodwill impairment for its skin-health
business.
WHAT WE WATCHED
GROWTH: Nestle's organic sales growth of 2.4% was below the 2.6%
increase expected by analysts. Bernstein says the slowdown in sales
during the fourth quarter doesn't bode well for early 2018. Last
year, Nestle posted organic sales growth of 3.2%.
L'OREAL: Nestle said it wouldn't renew a shareholders' agreement
for its 23.12% stake in L'Oreal with the Bettencourt family "in
order to maintain all available options for the benefit of Nestle
shareholders." Analysts at Investec believe this decision gives
Nestle greater flexibility if and when it decides to sell in the
future, but doesn't expect changes in the short term.
PORTFOLIO: Nestle said it is exploring strategic options,
including a potential sale, for its Gerber Life Insurance business,
but remains committed to keeping and developing its Gerber Baby
Food business.
Write to Anthony Shevlin at anthony.shevlin@dowjones.com
(END) Dow Jones Newswires
February 15, 2018 05:06 ET (10:06 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Nestle (PK) (USOTC:NSRGY)
Historical Stock Chart
From Apr 2024 to May 2024
Nestle (PK) (USOTC:NSRGY)
Historical Stock Chart
From May 2023 to May 2024