LONDON — Unilever announced Thursday its fourth-quarter 2007 net profit dropped 63 percent year-on-year to 787 million euros, or $1.14 billion at average exchange rates.

The decrease was largely due to the 1.2 billion euros, or $1.74 billion at current exchange, disposal of the consumer-goods giant’s frozen-foods business in Europe in November 2006, which created a tough quarterly comparison.

Profits for full-year 2007 fell 18 percent to 4.14 billion euros, or $5.67 billion at average exchange. Unilever generated 9.89 billion euros, or $14.33 billion, in sales in the fourth quarter, an increase of 2 percent year-over-year. Revenues for 2007 came in at 40.19 billion, or $55.09 billion, representing a 1 percent gain over 2006.

“The fourth quarter was a strong finish to a good year,” said Patrick Cescau, group chief executive. “Two-thousand-and-seven marks the third successive year of accelerating sales growth and came with an underlying improvement in margin.”

The company’s full-year operating margin was 13.1 percent. Unilever’s personal-care business, including brands such as Dove and Sunsilk, reported underlying sales growth of 7.2 percent for the fourth quarter and 6.7 percent for 2007.

Although during a conference call Cescau noted challenges — including rising commodity costs, an economic slowdown in the U.S. and a predicted deceleration of GDP growth elsewhere, particularly in Europe, this year — he believes Unilever is well-placed to meet such hurdles because of a leaner corporate structure, strong innovation pipeline, broad product offer spanning price points and channels, as well as wide geographic exposure.

Cescau expects the company’s underlying 2008 sales growth to be “towards the upper end of our 3 percent to 5 percent target range” and is confident the company will reach its 2010 goal of operating margin in excess of 15 percent.

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