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Market Update

Nestle, Strayer Education Earnings on Tap

Investors will key in on commodity costs at Nestle and enrollment growth prospects at Strayer Education.

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 Nestle  (NSRGY), the world's biggest food and drink company, is expected to report upbeat full-year earnings before the market opens Thursday. Shareholders will be paying more attention to its 2011 outlook, amid growing input costs and unfavorable foreign exchange rates. Rival food giant  Unilever (UN) (UL) also said it had been negatively affected by soaring commodities costs.

During the last quarterly earnings report, growth for Nestle--which sells well-known brands like Nescafe, Haagen Dazs, and Nespresso--was mainly driven by healthy demand in the developing markets. "We think Nestle's growth opportunities will be limited to developing and emerging markets, rather than developed countries, where competition is increasing from low-priced brands," Morningstar analyst Philip Gorham wrote  in a recent report. "In the short term, however, emerging economies such as Eastern Europe are likely to offer few growth opportunities as consumers continue to spend cautiously amid an environment of high unemployment."

Anuradha Ramanathan does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.