Dive Brief:
- Nestle said it will spend $8.8 billion to buy back shares. The stock repurchase will begin this year and run through 2015.
- The news comes as Nestle, which earns more from the sale of food than any other company on earth, said adjusted revenue rose 4.7% in the first half of the year.
- The maker of brands such as Gerber, KitKat, Nespresso, and Stouffer's said sales in the United States climbed 4.9%.
Dive Insight:
There are lots of interesting tidbits in Nestle's earnings report. Among the more notable is that the 4.7% rise in revenue can be attributed to a mix of acquisitions, divestments, and currency shifts. Sales on an organic basis dropped 4.8% in the first half, as net profit fell 9.6%.
Still, those numbers were better than what competitors are reporting, and sales rose in early trading.
The other item of note is that, although the share buyback is substantial, it's only about half of what Nestle could have done given its cash situation. That means the Swiss company intends to keep billions on hand until it finds suitable acquisitions.