Consumer products giant Unilever plc (NYSE: UL) reported a whopping 39% increase in earnings per share, to $0.68 for the first quarter of 2008. But before you get too excited about the results, it pays to dig a little deeper.

Turns out a significant portion of the bottom-line improvement came from selling the Boursin Cheese business, along with an extension of a joint venture between its Lipton Tea Brand and Pepsi (NYSE: PEP).

Still, volume growth continued displaying the momentum we have seen in recent quarters. Underlying sales were up 7.2% (adjusted for acquisitions, divestitures, and currency effects), representing a fifth consecutive quarter of posting organic sales growth greater than 5%. The company was able to pass along price increases equivalent to 4.8%, which gave a boost to the top line, and also helped offset commodity cost headwinds that continue to challenge competitors like Kraft Foods (NYSE: KFT), Kellogg (NYSE: K), and General Mills (NYSE: GIS).

Despite the challenging cost environment, Unilever managed to grow operating margins by 30 basis points (stripping out the one-time effects), using a combination of price increases and some expense leverage.

Unilever is in the midst of a multiyear effort to transform the company into a faster growth engine -- with a focus on developing markets, higher potential product categories like personal care, and creating a leaner operating structure.

I continue to admire the progress management is making. It's not an easy task to drive change in a company that's been in business for more than 120 years, but Unilever is making steady strides toward the world-class results of Procter & Gamble (NYSE: PG) and Colgate-Palmolive (NYSE: CL).

While Unilever's valuation may look a little high compared to those best-in-class competitors, I don't see a lot of downside here. The company is delivering solid growth, along with a 2% dividend yield. And as long as the U.S. dollar remains weak compared to the euro, investors in Unilever could continue to benefit.

Related Foolishness:

Unilever and Kraft are Motley Fool Income Investor selection. Colgate-Palmolive is an Inside Value pick. Try either service free for 30 days.

Fool contributor Timothy M. Otte surveys the retail scene from Dallas. He welcomes comments on his articles, but doesn't own shares of any of the companies mentioned in this article. The Fool has a disclosure policy.