Danone revenue growth misses estimates on Southern Europe
2012-10-17 12:40:25
Danone, the world’s biggest yogurt maker, reported third-quarter revenue growth that missed analysts’ estimates as sales of dairy products in Spain and Italy fell, making the full-year target more difficult to reach.
Revenue adjusted for acquisitions, divestments and currency swings rose 5 percent, the Paris-based company said today in an e-mailed statement. That trailed a 6.1 percent average of 15 analysts’ estimates. The stock fell as much as 3.1 percent.
The maker of Actimel yogurt suffered declines of more than 10 percent in third-quarter sales in Spain and Italy. Danone cut its profitability forecast June 19 as Spanish shoppers switched to cheaper products and raw-material costs increased. The miss may mean Danone will just narrowly meet its full-year target of adjusted sales growth of 5 percent to 7 percent, Andrew Wood, an analyst at Sanford C. Bernstein said.
“Danone might just limp over the finishing line,” he wrote in a report. “It is becoming more evident that the fundamental/structural issues that Danone is facing in Fresh Dairy in Europe are more serious, and could take longer to repair, than previously believed.”
The stock traded 2.2 percent lower at 47.70 euros as of 9:01 a.m. in Paris.
Dairy Disappoints
So called like-for-like sales at Danone’s fresh dairy products division rose 0.7 percent. Barclays Plc had expected like-for-like growth of 3 percent while Liberum Capital had expected a 2.5 percent increase. Like-for-like sales and volume declined in Europe this quarter.
“The dairy division again saw a negative volume momentum that was disappointing,” said Marco Gulpers, an analyst at ING Bank NV in Amsterdam, in a phone interview. “Everybody will have to take their numbers down.”
Total revenue rose 9.3 percent to 5.26 billion euros ($6.9 billion).
Danone reiterated its guidance for the year, saying the operating margin will probably narrow by 0.5 percentage points on a like-for-like basis.
The yogurt maker in July said it raised its stake in its Spanish unit for about 382 million euros.