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Nestle First-Half Earnings Up 7.5%

Nestle's first-half net income rises 7.5%, although the food giant sees a more challenging input cost environment.

ZURICH (TheStreet) -- Nestle (NSRGY) - Get Nestle SA ADR Report reported a 7.5% increase in net profit for the first half of 2010, although the world's largest food company expects a challenging cost input environment in the back half of the year.

Nestle said it had a first-half net profit of 5.5 billion Swiss francs ($5.19 billion), which rose from a net profit 5.07 billion francs in the first half of 2009.

Revenue in the first six months climbed to 55.34 billion francs from 52.27 billion francs in the first half of 2009, as the emerging markets in Asia, Oceania and Africa saw organic growth of 9%. By comparison, the U.S. zone had organic growth of 6.1% and Europe growth was 2.2%.

Looking ahead, Nestle CEO Paul Bulcke said in a statement that the second half of 2010 will see "a more challenging input cost environment." Recently, prices of wheat, powdered milk and cocoa have surged, which is expected to increase costs for companies.

However, Bulcke said Nestle has "increased investment in our brands, people and capabilities and have prepared the company for a more challenging second half."

Bulcke also reconfirmed Nestle's earlier full-year guidance for organic growth of around 5% in food and beverages and a stronger margin.

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