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Nestlé posts record profit
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February 25, 2000: 4:30 a.m. ET
Shares jump as world's biggest food manufacturer beats forecasts
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LONDON (CNNfn) - Swiss-based Nestlé beat expectations with a 12.3 percent rise in earnings for 1999 as restructuring efforts at the world's largest food company started to bear fruit.
Nestlé, best known for chocolate bars and Nescafé instant coffee, said net profit rose to a record 4.724 billion Swiss francs ($2.92 billion) from 4.205 billion a year earlier, thanks to rising sales volume and improved profit margins. The result was well ahead of the 4.55 billion francs consensus estimate among analysts polled by Reuters.
Nestlé shares jumped 3.6 percent to 2,867 Swiss francs in early trade.
Sales rose 4.1 percent to 74.66 billion francs, while the company said that excluding exchange-rate variations, sales growth quickened to 3.6 percent last year from 3.3 percent in 1998. The company said that it expected sales and earnings to rise further this year, provided that currency markets remain stable. Nestlé made no forecasts, however.
Operating earnings in North America rose 16 percent while European activities posted a 6.2 percent advance. The company said that emerging markets remain weak, despite some improvements in its Asian business. Ice cream and milk products were the company's strongest business segment, with operating profits jumping 18 percent last year on a 1.5 percent rise in sales.
Nestlé announced a series of efficiency measures last April, including the divestment of part of its frozen food business.
Friday's rally helped make up some of the 5 percent fall in Nestlé shares this year, which had cut its market value to around $68 billion. 
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Nestlé
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