Snacks group Mondelez beats third quarter estimates and raises forecasts
Cadbury owner has been working to boost productivity and cut costs in sluggish market
The logo of Cadbury chocolate sits on display at the Bournville Cadbury factory, operated by Mondelez International in Birmingham. Photographer: Simon Dawson/Bloomberg
Mondelez International, the owner of Cadbury and the maker of snacks such as Oreo cookies and Ritz crackers, topped third-quarter profit estimates and raised its earnings forecast, lifted by cost-cutting efforts.
Excluding some items, profit amounted to 50 US cents a share last quarter, the company said today in a statement. Analysts had estimated 39 cents on average.
Shares in the group - formerly the snacks business of Kraft Foods – jumped as much as 4.2 percent after the results were released.
Facing sluggish snack demand and declining revenue, the company has been working to boost productivity and reduce expenses.
Activist investor Nelson Peltz has added to pressure for cutbacks at the company. Mondelez named Mr Peltz to its board in January after his Trian Fund Management abandoned a proposal for Mondelez to merge with PepsiCo to spur growth.
“With global retail and consumer demand expected to remain soft in the near term, we’re sharply focused on the execution of our productivity and cost-reduction programs to drive earnings growth,” Irene Rosenfeld, chairwoman and chief executive, said in the statement.
The company forecast earnings of $1.82 to $1.87 a share for the year, up from a previous projection of no more than $1.69. Analysts had estimated $1.66.
While Mondelez’s results exceeded predictions, profit still fell from a year earlier. Net income dropped 11 per cent to $899 million, or 53 cents a share, from $1.01 billion, or 56 cents, in the third quarter of 2013.
Net revenue fell 1.6 per cent to $8.34 billion. European revenue fell 2.4 per cent last quarter, hurt by some retailers balking at price increases. Asia Pacific rose 1.3 per cent, while Latin America climbed almost 19 per cent, helped by higher prices and improving volume in Brazil. – Bloomberg