Reckitt Benckiser results beat market expectations

Reckitt Benckiser has beaten market expectations with its second-quarter results, raising both its sales and profit targets for the full-year. Nick Raynor, investment adviser at The Share Centre comments on today's results and why it remains a favourite:

"Reckitt Benckiser continues to shrug off the economic downturn and beat market expectations with ease as profits have risen by a third and sales are up 23%. As a result, the company raised estimates for both sales and growth for a full year, making this a great investment.

"With 17 major power brands including Cillit Bang, Nurofen painkiller and Lysol disinfectant, Reckitt Benckiser's strategy is simple and well executed. So long as core products remain strong, the company's constant stream of innovations should keep sales moving upwards. Even on a steep earnings multiple there is plenty of long tem upside potential.

"Reckitt has been a favorite of ours for a long time. Its basic portfolio of products that prove essential to most households, has helped keep the share price at a healthy level during 2009. We continue to list the company as a defensive buy with its income becoming more appealing with its half year dividend rising 34% to 43p."

Also issuing results today, BG Group saw profits fall by a third due to the slump in oil price. However, these were at the top end of analysts' expectations, Nick Raynor continues:

"Shares in BG group dropped 2.1% following this morning's news. With the weakness in the world economy, the demand for gas is being hit harder than oil, with BG not being able to meet its 2009 production target.

"Investors should keep and eye on further updates on its deep under water oil discovery, known as Tupi based in Brazil. Tupi is one of the largest finds in decades and is key to BG's long-term growth. Production is due to begin in 2010 and may contain between 12bn-20bn barrels of oil - up from previous estimates of 1.7bn-10bn barrels."BG has increased its dividend by 20% but overall it is still negligible and we advise i only for those looking for growth and not income. We continue to list BG as a buy for growth seekers only."