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Nestle Q1 sales up thanks to emerging markets

GENEVA — Swiss food and drinks giant Nestle SA reported first-quarter sales of 21.39 billion Swiss francs ($23.34 billion) Friday, up 5.6 percent from a year earlier, thanks mainly to strong growth in emerging markets and higher retail prices.

The maker of Nescafe, Haagen Dazs and Jenny Craig said sales in developed markets were subdued by low consumer confidence amid global financial uncertainty in the United States — Nestle's biggest market — and Europe. Sales in in developed countries grew 3.1 percent, compared with 13 percent in emerging markets.

"As anticipated, 2012 is already confirming itself to be a challenging year," CEO Paul Bulcke said in a sales update statement.

"In many developed markets where consumer confidence is low, the trading environment is subdued whilst in most emerging markets, conditions remain dynamic and rich in growth opportunities," he said. "Our past and present investments, and continuing innovation, have enabled us to deliver good growth in the first quarter."

The results of the Vevey, Switzerland-based company generally met or exceeded analysts' forecasts. No profit figures were disclosed.

Andrew Wood of the Sanford C. Bernstein research firm said he had anticipated that Nestle would have a "fairly strong top-line start to the year," but did not believe it would be enough to get its stock "moving again, particularly given current lofty valuations."

The results were posted before the start of trading on the Zurich exchange. Nestle shares closed at 57.20 francs ($62.42) Thursday and have risen almost 6 percent this year.

Bulcke said a combination of higher prices and the expectation of cheaper prices for raw materials in the second half of the year has enabled the company to "confirm our full-year outlook of delivering 5 to 6 percent organic growth" and higher earnings for shareholders.

On Thursday, Nestle held its annual general meeting in Lausanne where shareholders approved a dividend of 1.95 francs ($2.13) per share.

Like many Swiss companies, Nestle has had to cope with the strength of the Swiss franc against other currencies, but since last summer Switzerland's central bank has moved aggressively to weaken the franc and improve the outlook for Swiss exports.

The world's biggest food and beverage maker said its organic sales growth was a robust 7.2 percent, while real internal growth was 2.8 percent.

Nestle said organic growth was 6.2 percent in the Americas, 2.3 percent in Europe and 11.4 percent in Asia, Oceania and Africa.

The company had posted sales of 22.34 billion francs ($24.38 billion) in the first quarter of 2010.

Nestle did not comment on its bid to buy Pfizer Inc.'s infant-nutrition business for a reported $9 billion, a deal that would help the Swiss-based company to boost growth in China and maintain its position as one of the world's largest sellers of infant formula.