Mondelez tops third-quarter profit estimates on easing cost pressures
MDLZ•Mondelez reported adjusted third-quarter profit of 78 cents per share, above analysts’ 71-cent estimate, while revenue of $9.97 billion was slightly below the $9.98 billion estimate. Lower raw material costs helped, and the company said it would buy Undercover Snacks.
1. Profit beats estimates
Mondelez International beat Wall Street expectations for third-quarter profit, helped by lower raw material costs, even as consumer confidence remained soft in North America. Adjusted profit was 78 cents per share for the quarter ended September 30, compared with analysts’ average estimate of 71 cents. Revenue was $9.97 billion, slightly below the $9.98 billion estimate.
2. Costs and consumer demand
A global cocoa surplus reduced costs, easing margin pressures and giving Mondelez more room to attract shoppers with promotions and value packs. CEO Dirk Van de Put said consumers were responding positively where the company had reinvested in value, while confidence in North America remained soft and was pressured by higher energy prices. Pricing rose 0.3 percentage points in the quarter, while volumes increased 1.8 percentage points.
3. Undercover Snacks deal
Mondelez said it would buy Undercover Snacks, which makes chocolate-coated quinoa crisps, to expand in the “permissible indulgence” snack category. The company has cut prices on some chocolate products in Europe after raising them during the cocoa rally and is beginning to see sales volumes recover.
