This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Nestle Hikes Prices, Sees Growth Ahead

Stocks in this article: NSRGY KFT UN UL PFE

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

VEVEY, Switzerland ( TheStreet) -- Nestle (NSRGY) had an admittedly "tough" first half as higher costs and a stronger Swiss franc pressured results and offset price increases, but the world's biggest food company sees growth ahead, particularly in emerging markets.

Nestle's Kit-Kat bars.

Nestle said it expects full-year sales to grow at the high end of its 5% to 6% forecast, and that margins in constant currencies would widen. A strong Swiss franc -- the currency in which Nestle reports its results -- cut first-half revenue by 13.8%.

Strong sales, particularly in emerging markets, helped the maker of Kit Kat, Carnation and Nescafe brands book 7.5% growth in first-half sales, indicating that second-half revenue will continue to face headwinds considering its full-year outlook.

Volatile costs for ingredients and raw materials represent some of those headwinds, along with "subdued" consumer spending in developed markets and economic instability on a global scale.

Passing higher costs for things like sugar, cocoa and coffee onto consumers can only help so much. Nestle raised prices on many of its products in the second quarter, even more so than it had in the first, just as fellow multinationals Kraft Foods (KFT) and Uniliver (UN) did.

"Investing in our business, both organically and through bolt-on buys, and increasing our dividend is our priority," said CFO James Singh, commenting that acquisition opportunities would be considered around the world.

Singh's comments, and Nestle's word that it would not initiate a new share- buyback program, stoked rumors that Nestle might consider acquiring Pfizer's (PFE) nutrition business, a unit the pharmaceutical company said in July it was looking to unload.

Nestle's net earnings in the first-half fell 12.7% year over year to 4.7 billion francs ($6.33 billion). Excluding the impact of the divestiture of its Alcon eyecare business, profit was flat.

American depositary receipts of Nestle fell 2.3% to $62.42 in morning trading in New York as the major stock indexes tumbled nearly 4% after the Federal Reserve vowed to keep interest rates near zero for at least two more years.

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

>To follow the writer on Twitter, go to

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs