Unilever to Shutter Atlanta Factory - Analyst Blog
29 Januar 2013 - 12:50PM
Zacks
Fast-moving consumer products giant, Unilever
N.V. (UN) announced that it will shut down its Atlanta
factory where the company manufactures spreads brands like Country
Crock, Imperial and I Can't Believe It's Not Butter. Unilever will
close this site by the end of Jun, thus eliminating 125 jobs. The
move has been made to deal with the spare capacity at its other
U.S. plants that make spreads.
Unilever, with dual headquarters in London and Rotterdam,
Netherlands, is the world's third-largest maker of consumer
products behind Procter & Gamble Co. (PG) and
Nestle. It is also one of the world’s leading suppliers of fast
moving consumer goods with strong operations in more than 100
countries and sales in 190.
Most recently, Unilever also posted decent fourth quarter and
full year 2012 results, with underlying (excluding the impact of
currency, acquisitions and disposals) sales growth of 7.8% in the
fourth quarter. The increase was driven by volume and pricing gains
of 4.8% and 2.9%, respectively. All the categories performed well
in the quarter, driven by increased investment in innovation and
brand building. This company also performed well in the emerging
markets despite global macroeconomic headwinds and unfavorable
foreign currency translations.
Overall, we are optimistic about Unilever’s wide portfolio of
brands, which helps it to maintain a dominant share in the market.
Unilever has been strengthening its portfolio by expanding through
a number of acquisitions. Further, Unilever has been divesting its
businesses to shed off its non-core operations, thereby optimizing
resources and allocating them to more promising markets.
Unilever sold its North America frozen meals business (brands of
Bertolli and P.F. Chang) in Aug 2012. More recently in early-Jan
2013, Unilever agreed to sell its Skippy peanut butter business to
Minnesota-based meat producer Hormel Foods
Corporation (HRL).
However, the company faces high commodity and raw material cost
that is impacting its margins since last many quarters. Moreover,
we continue to expect an uncertain macro-economic environment,
going forward. Though the company forecasts volume gains and strong
free cash flow in the near term, commodity cost inflation will
continue to be a headwind. Unilever currently holds a Zacks Rank #4
(Sell). However, its peer The J. M. Smucker
Company (SJM) carries a Zacks Rank #1 (Strong Buy) and is
worth considering.
HORMEL FOODS CP (HRL): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis Report
SMUCKER JM (SJM): Free Stock Analysis Report
UNILEVER N V (UN): Free Stock Analysis Report
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