Sales in the first three months of 1999 were down by 1 per cent because of difficult economic conditions in European and Latin American markets while pre-tax profits fell by 4 per cent to pounds 666m.
The shares fell 5 per cent to 559.5p, continuing their downward run. Since Unilever announced in February that it was returning pounds 5bn to shareholders through a special dividend the shares have lost 10 per cent of their value.
Despite the setbacks in central and eastern Europe and Latin America - due respectively to the Russian economic collapse and disappointing icecream sales in Brazil - Unilever said that South-east Asia was beginning to show signs of recovery. Sales in Asia and the Pacific were up 5 per cent, driven by strong performances in India and China.
Analysts were surprised by a fall in sales in North America - Unilever's second biggest market after Europe. The company blamed the 3 per cent decline in sales on lower food sales and a mixed performance in home and personal care products.
Unilever said the dip in sales needed to be seen in the context of a very strong first quarter in 1998 and that it expected to re-establish sales growth in the remainder of the year.
Analysts gave Unilever the benefit of the doubt, saying there was no need to change full-year forecasts at this stage. Rabobank is forecasting 1999 profits of pounds 2.9bn on sales of pounds 28bn, putting the shares on a multiple of 21.5 times prospective earnings.