Nestle shares opened lower on disappointment that 10-month sales grew less than expected and concern that 1998 net profit growth would only be in the low single-digit range, traders and analysts said.

The share price fell by more than four per cent in initial Swiss exchange trading, giving up 128 Swiss francs to 2,995 just after the bourse opening.

Nestle said group sales in the first 10 months of 1998 rose just four per cent to 59.2 billion Swiss francs ($41.99 billion), less than the 59.8 billion implied by the five per cent growth rate forecast by analysts.

"As a result of adverse currency effects and given the continuing uncertainty regarding foreign exchange rates, the sales drop in Russia and in some Asian countries as well as higher interest rates in Latin America, Nestle does not expect the evolutionof consolidated net profit to match the growth in consolidated sales," the company said in a statement.

Analysts said the figures came as a disappointment.

"It basically means low single-digit profit growth," analyst James Amoroso at Zurich'as Bank Julius Baer said about Nestle's net profit forecast. Most market estimates had ranged from upper single digits to lower double digits, he added.

On the other hand, Amoroso said growth in 10-month sales volume was positive.

"Whether it has been generated because they have done something to their pricing, I don't know. There are still too many questions."

Nestle said underlying sales volume rose 4.6 per cent, in line with company expectations.

It said this increase was "satisfactory, in view of the adverse evolution of foreign exchange rates versus the Swiss franc as well as the successive crises in Asia, Russia and in some countries in Latin America."

"In spite of the difficult environment, Nestle maintains its real internal growth objective for 1998of four per cent," it said in a statement ahead of a news conference scheduled for 0930 GMT.

Nestle said good performance in industrialised Europe and North America more than compensated for slower or even negative growth in several emerging countries.

"The negative currency effect amounted to 5.7 per cent," the company said.

It said acquisitions, net of divestments, contributed three per cent to growth and the company was able to increase prices by 2.1 per cent.