April 29--Mondelez's profit nearly doubled in the first quarter, even though currency fluctuations took a bite out of its international business and sales in developed markets were weak.
Here's a look at how the Deerfield-based maker of Oreo cookies fared last quarter and a bit of what's to come.
Profit: Net income nearly doubled to $324 million, or 19 cents per share, from $163 million, or 9 cents per share, a year earlier. Adjusted earnings per share jumped more than 25 percent to 41 cents, exceeding analysts' forecast of 38 cents. Adjusted profit excludes restructuring costs and other factors.
Revenue: Revenue fell 10.2 percent to $7.76 billion, but was still higher than the average Wall Street forecast of nearly $7.72 billion.
Organic revenue, which strips out factors such as currency rate fluctuations, acquisitions and divestitures, rose 3.8 percent, helped by price increases. Such revenue rose 10.8 percent in emerging markets but fell 0.5 percent in developed markets.
Gum was a bright spot in the quarter, with the maker of Trident growing faster than the industry. In chocolate, however, Mondelez's growth was substantially lower than the category overall.
Looking ahead: Mondelez stood by its financial projections, including a forecast for organic revenue growth of at least 2 percent in 2015. It expects adjusted earnings per share to rise at a double-digit rate, excluding the impact of currency.
Mondelez this year said it was doing what it could to cut costs and improve its production as it saw limited opportunities for strong near-term sales growth. The company has been updating its supply chain, including making changes at some existing manufacturing plants and opening new ones in emerging markets.
Mondelez expects its coffee joint venture, announced in May 2014, to close sometime in the third quarter of 2015, while its majority investment in Vietnam's Kinh Do biscuit company should be completed in the middle of the year.
Currency impact: Mondelez is feeling the pinch of the stronger dollar when translating international results from local currencies. This year, it expects foreign exchange translation to reduce net revenue growth by about 12 percentage points and cut about 33 cents from adjusted earnings per share.
Quote you on that: Analysts were upbeat about the results including the earnings per share, sales and margins. "At first blush, we're impressed by the execution," said Wells Fargo's John Baumgartner. "Some may wonder why full-year guidance was not raised, but we are only one quarter into the year," wrote JPMorgan's Ken Goldman.
"I'm quite happy with the start to the year, I think we're executing well on just about every dimension," Chairman and CEO Irene Rosenfeld told the Tribune. "I want to make sure the operating environment doesn't get any more volatile than it already is."
Stock moves: The shares jumped 5.2 percent to $38.70 on Wednesday. Mondelez said it repurchased $1.5 billion of its stock during the quarter at an average price of $35.98 per share.
jwohl@tribpub.com
