Shares in Unilever climbed this morning (4 August) after the consumer goods giant’s first-half results calmed the City’s fears over its margins.

The Magnum ice cream maker reported a 20 basis point fall in underlying operating margin for the first half of 2011.

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However, Unilever said price increases and cost savings had helped to mitigate the impact of higher input costs.

Analysts were sanguine about the fall in margins and said they had expected worse.

Andrew Wood, senior research analyst for Europe’s food, home and personal care sectors at Sanford Bernstein, said the consensus among analysts was that Unilever’s margins would fall by 50 basis points.

“A fall of 20 basis points shows that Unilever is managing through the commodity cost increases and delivering margins/results which are steady and reliable,” Wood said.

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Unilever’s operating profit climbed 8% during the first half of the year to EUR3.31bn (US$4.72bn). Turnover was up 4.1% at EUR22.8bn. The growth in the company’s underlying sales accelerated during the second quarter and stood at 5.7% after the first six months of 2011. Net profit increased 9% to EUR2.41bn.

“We are making encouraging progress in the transformation of Unilever to a sustainable growth company. In a tough and volatile environment we have again delivered strong growth,” CEO Paul Polman said.

Unilever did not give a specific forecast for its results for the rest of the year. Instead, Polman, who prefers analysts to focus on long-term targets, said: “Our priorities remain: profitable volume growth ahead of our markets, steady and sustainable underlying operating margin improvement and strong cash flow.”

Shares in Unilever had climbed 4.78% to GBP19.96 at 08:45 this morning.

Click here for the full earnings statement from Unilever.