Unilever shares dive on profit warning - UPDATE

1st Oct 2013 12:14

Consumer goods giant Unilever issued a profit warning after-hours on Monday, sending shares plummeting the following morning. The group, which owns brands such as Dove and Persil, revealed that it has experienced weakening in the market growth of many emerging countries during the third quarter and as such expected underlying sales growth of 3-3.5% for the three-month period compared to the 5.0% seen in the previous two quarters. The company, which had not issued a profit warning for nearly 10 years, had been anticipating growth of 6%, according to broker Nomura. The slowdown in emerging markets, where the company generates around 60% of its sales, has accelerated as a result of significant currency weakening, the company went on to explain, adding that developed markets remain flat to down.However, Paul Polman, the multi-national´s Chief Executive Officer (CEO) stated: "We continue to grow ahead of our markets and expect underlying sales growth to improve in quarter four. "For 2013 we are still on course to deliver against our priorities of profitable volume growth ahead of our markets, steady and sustainable core operating margin improvement and strong cash-flow".Nomura estimated that if sales in developed markets were flat during the period, then emerging-market growth (EMG) would have slowed from 10.3% in the first half to around 6.2%."This will weigh on expectations for fiscal year 2013 sales progression and corresponding margin development. Leads us to cut earnings per share (EPS) [forecasts] and target price by 6%," the broker said.The share price plunged 89.05p, equal to 3.65%, by midday on Tuesday. NR