Danone (EPA:BN) profits surged despite weakness in its core dairy segment

Danone (EPA:BN) profits surged despite weakness in its core dairy segment

Danone (EPA:BN) profits surged despite weakness in its core dairy segment

Thursday July, 27 2017 Paris-based Danone (EPA:BN) announced its quarterly earnings results with a surge in profit, citing strong revenue growth in baby food and medical nutrition make up for weakness in its core dairy activities, which comprise the U.S. WhiteWave business it purchased last year.

For the second quarter Danone (EPA:BN) revealed half yearly net profit closing June 30 surged to 977 million Euros or $1.15 billion from EUR880 million.

Meanwhile the maker of Actimel and Activia’s operating profit on a recurring basis, which is a closely watched indicator that leaves out the impact of takeovers and foreign exchange fluctuations was EUR1.72 billion for the period. That was 16% more year over year and on top of market outlook of EUR1.65 billion.

During the last three months period revenue surged 9.7% to EUR12.13 billion as the company received a hit from consolidating the operations of WhiteWave, the U.S. organic foods producer that it purchased for $10.4 billion earlier this year.

Furthermore company’s chief Executive Emmanuel Faber has faced a hold back in emerging markets and altering preferences in urbanized countries, where customers are more and more turning toward healthy and organic items rather than conventional ones.

To counter that, Mr. Faber has spent heavily to bolster its high-class product line as he attempt to return the company to “strong, profitable and sustainable growth,” by 2020.

“As expected, the slow start of the year is the result of specific emerging markets’ headwinds and challenges in Europe and in North America,” Mr. Faber said.

Earnings report revealed that company’s like-for-like sales plunged 2% in international dairy in the first half and dropped 2.9% in North America. Baby and medical food sales went up 5.4% to EUR3.45 billion.

Moreover, Danone (BN) said in a statement, its recurring operating margins during the first half of 2017 hit 14.2%, a rise of 0.91% points like-for-like.

Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.

CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.

When trading in stocks your capital is at risk.

Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.