Why Unilever Stock Was Gaining Today

Shares of Unilever (NYSE: UL) were marching higher today after the consumer packaged goods giant posted strong results in its second-quarter earnings report. As a result, the stock was up 5.4% as of 1:58 p.m. ET.

Unilever impresses

Unilever, which owns brands like Ben & Jerry's, Dove, and Hellmann's, said that comparable-sales growth was up 3.9% in the second quarter, driving overall revenue up 2.2% to 16.1 billion euros. First-half revenue of 31.12 billion euros was slightly ahead of estimates at 30.99 billion euros.

The company also posted solid margins. Organic operating margin was up 250 basis points to 19.6%, and adjusted earnings per share rose 16.3% to 1.62 euros. Volume growth in the second quarter rose 2.9%, showing the underlying business was improving in addition to a benefit from inflation that has led to higher prices on packaged goods.

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Unilever also raised its dividend by 3% and said it was beginning a 1.5 billion euro share-buyback program. Finally, management said the planned spinoff of its ice cream business is on track to be completed by 2025. The company believes the move will simplify its business and help drive its category-focused operating model.

CEO Hein Schumacher said: "We are focused on high-quality sales growth and gross margin expansion, led by our Power Brands. Over the first half, we made progress on those ambitions."

Where Unilever goes from here

The household-products company continues to see organic sales growth rising 3%-5% this year, in line with its multiyear target rate, and sees most of the growth being driven by volume. It also expects organic operating margin of at least 18%, though it said margin improvement would slow down in the second half.

Overall, the company is executing and rewarding investors with higher dividends and share buybacks. Meanwhile, investors seem to like the ice cream spinoff plan.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Unilever. The Motley Fool has a disclosure policy .