Groupe Danone said Thursday that net profit fell 7.6% in 2006, but the French food company's shares surged on a stronger-than-expected fourth-quarter performance boosted by its dairy division.
The maker of Dannon yogurts, LU cookies and Evian bottled water said net profit fell to 1.35 billion euros ($1.77 billion) last year from 1.46 billion euros in 2005 despite an 8.1% increase in revenue to 14.07 billion euros ($18.41 billion) from 13.02 billion euros.
Excluding discontinued operations, net profit would have risen 15.8% to 1.2 billion euros ($1.57 billion), with earnings per share up to 4.88 euros ($6.38) from 4.14 euros.
Shares of Paris-based Danone rose as much as 4% to 125.00 euros ($163.53) in Paris.
The dairy division, which accounts for more than half of group revenue, posted 9.1% year-on-year fourth-quarter revenue growth on an organic basis -- stripping out the effects of selloffs, acquisitions and exchange-rate fluctuations.
In a conference call, Chief Financial Officer Antoine Giscard d'Estaing said the company enjoyed a "very good performance from the dairy division" in 2006.
Overall organic revenue growth was 11.5% in the quarter, and 9.7% for the year -- beating both the 8.8% expected by analysts and the company's own guidance of 8%.
Credit Suisse said the October-December period was "simply the best quarter we can remember from the group, certainly over the last six years."
For 2007, Danone said it is confident it will achieve organic growth between 6% and 8%. The company's net debt dropped to 2.9 billion euros ($3.79 billion) at the end of 2006 from 3.57 billion euros a year earlier.