Falling media rates helped Unilever report fourth-quarter earnings of $789 million, up from a year-ago loss of $337 million and at the high end of analysts' expectations despite a sales decline of 3% to $11.7 billion dollars.
Net income for the quarter was $207 million, up from a $945 million year-ago loss. Earnings per share were 20 cents, up from a loss of 96 cents.
A larger-than-expected decline in advertising and promotion spending fueled savings of about $514 million, producing a 1.1 percentage-point improvement in Unilever's gross margin for full-year 2001. About 0.6 points of margin improvement come from lower media rates and improved media-buying efficiency and the rest stemmed from addition of Bestfoods, with its lower marketing spending as a percent of sales compared to Unilever's home and personal care businesses.
In all, Unilever's advertising and promotion spending fell 1.2% to $5.95 billion.
Though he expects the global economy to remain weak in 2002, Unilever Co-chairman Niall Fitzgerald said in a conference call with analysts that he expects Unilever to significantly increase marketing spending in 2002.
Howard Green, head of investor relations, added that Unilever remains committed to its goal to increase marketing spending as a percent of sales by 2 percentage points by 2004.