The 5.1 percent rise in underlying growth met the Swiss firm's own target of five to six percent annually but fell short of the 5.3 percent expected by 11 analysts in a Reuters poll.
"Overall it is under our and consensus expectations," said Claude Zehnder, Zuercher Kantonalbank market analyst. "The outlook is not that spectacular. Nestle has gained in the last few days and you see some profit taking," he added.
Nestle got a boost from a heatwave in Europe last summer as consumers guzzled its ice cream and water, raising expectations among investors for the full-year result.
"The fourth quarter for organic (underlying) growth was somewhat difficult," Chief Executive Peter Brabeck said in an interview with Reuters, adding this was due to the dampening effect of Nestle's policy of increasing prices early in 2003.
Brabeck said he expected a better year in 2004 driven by "excellent" US conditions and improvement in Latin America and Asia, particularly China.