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Title: Unilever Reveals "Shocking" Margin Outlook Blamed On Soaring Commodity Costs
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URL Source: https://www.zerohedge.com/markets/u ... blamed-soaring-commodity-costs
Published: Feb 10, 2022
Author: Tyler Durden
Post Date: 2022-02-10 10:25:13 by Horse
Keywords: None
Views: 70
Comments: 1
Global investors are on the edge of their seats this morning ahead of the inflation data from the US. The print could show January accelerated .4%, for a 7.2% increase from one year ago, which would be one of the highest inflation readings in four decades. This reading would imply tighter monetary policy from the Federal Reserve. Ahead of US inflation data, European investors were "shocked" by Unilever Plc's awful margin outlook due to soaring inflation costs. It appears 4Q21 sales were better than expected, but that's not what investors focused on, as it became apparent the market concentrated on margin compression, eroding the benefits of faster growth. Diving into the earnings report, the British multinational consumer goods company that makes food, condiments, ice cream, well being vitamins, minerals, and supplements, among many other things, expects raw material costs to increase by $2.3 billion. The company said its operating margin will shrink by 2.4 percentage points in 2022, adding it doesn't expect margin recovery until 2023 and complete recovery by 2024. Chief Financial Officer Graeme Pitkethly told investors that Unilever is passing along costs to consumers, with pricing last quarter at the highest in a decade. He blamed soaring commodity costs. Pitkethly said the rapid increase of crude oil, palm oil, soybean oil, and other commodities used to produce consumer goods are some of the leading causes of rising costs. "This hasn't happened in well over a decade, if ever," he warned. None of this is shocking as Goldman's head commodity strategist and one of the closest-followed analysts on Wall Street, Jeff Currie, said earlier this week he's never seen commodity markets pricing in the shortages they are right now. "I've been doing this 30 years and I've never seen markets like this," Currie told Bloomberg TV in an interview on Monday. "This is a molecule crisis. We're out of everything, I don't care if it's oil, gas, coal, copper, aluminum, you name it we're out of it." European equity strategist at Bank of America Milla Savova warned about intensifying pressure on margins for European companies. She explained the earnings-per-share beats relative to sales beats in the last quarter were the lowest level since the firm began tracking in 2012, "pointing to increased margin pressure." Poster Comment: Unilver is a Jewish company. This does not look like a strong stock market for 2022.
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#1. To: Horse, 4um (#0)
The "Crapification" Of The US Economy Is Now Complete The crapification of the U.S. economy is now complete. The only thing left is the tiresome waiting for the implosion of the entire travesty of a mockery of a sham.
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