Unilever’s (NYSE:UL) reported its first quarter earnings April 25, and investors have much to cheer about. The company reported total revenues of $16.23 billion, delivering solid underlying sales growth of 4.9% year-on-year. This was supported by a balanced positive movement between volume and prices of 2.2% and 2.6% respectively. The results were slightly below our expectations, as can be seen in our earlier analysis here. 
Solid Sales Growth In Emerging Markets; Developed markets decline
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More than 57% of total Unilever revenues come from the emerging markets and the rest comes from the developed markets. Similar to last year, emerging markets drove the revenues in first quarter while developed markets reported a negative change. Emerging economies clocked a net growth in sales of 10.4%. The growth in emerging economies was broad based and largely supported by volume. Countries like Indonesia, Vietnam, Thailand, China and Turkey contributed substantially to the overall improvement. Kalina beauty brands, acquired in 2011, showed excellent progress during the first quarter. The company has also deepened its distribution in India and Indonesia to take advantage of the growing demand in these regions.
Meanwhile, the developed markets disappointed the investors by contributing negatively to overall sales growth, it was down 1.9%. This is majorly driven by a slowdown in Europe as the underlying sales declined by 3.1% while in the Americas it grew by 6.1%. Lower sales growth in Europe is a result of continued erosion of consumer confidence due to the fiscal tightening and financial crisis. Latin America outperformed by delivering solid 12.3% growth year-on-year, with Brazil and Argentina markets contributing significantly. 
Home Care And Personal Care Segments Outperform
We estimated that the home care and personal care division would grow ahead of the markets in our previous analysis. The latest earnings report were in line with our estimates as the personal care division rose by 8.3%, slightly behind the 9.4% growth in home care division. It was a broad based growth in the personal care division with the company successfully expanding its reach into newer geographies. AXE Apollo penetrated 60 countries in less than three months while Lifebuoy clini-care 10 was launched in Indonesia, Kenya and Ghana. The company also successfully marketed Ponds BB+ cream in Thailand and Indonesia.
The home care division has shown eight quarters of consistent growth, supported by sustained innovation and better performing products. Growth in this quarter was equally due to a 5.2% rise in volume and a 3.9% rise in prices, largely by consumers choosing to buy premium products like liquids and fabric conditioners in addition to basic detergents. The company also expanded its reach into previously untapped geographies. Growth was supported by the launch of Breeze active bleach in Philippines, Comfort super-sensorial in South East Asia and Domestos and Cif in Brazil. The refreshment division saw sales growth of 2.2% while Foods sales declined marginally by 50 basis points. 
We have updated our price estimate of $39 for Unilever based on the latest results.Notes: