July 31--Mondelez International, the maker of Oreo cookies, Sour Patch Kids and Trident gum, on Thursday said its second-quarter profit fell nearly 35 percent but still exceeded analyst expectations.
The Deerfield-based snack company is looking for ways to boost its results amid a slowdown in the global snacks business. Earlier this month, Mondelez closed on two deals: It completed the merger of its coffee business with that of a smaller rival, and it acquired an 80 percent interest in a Vietnamese biscuit company.
The company increased its share buyback plan by $6 billion and boosted its outlook for the year for revenue growth. Shares were up Thursday after closing at $43.10 on Wednesday.
Mondelez released its second-quarter earnings report one day after announcing plans to slash half the workforce at its Southwest Side bakery in Chicago.
The company opted to add four state-of-the-art manufacturing lines in Salinas, Mexico, instead of investing $130 million in equipment upgrades to the facility commonly known as the Nabisco plant at 7300 S. Kedzie Ave. over the next year. As a result, Chicago will lose 600 jobs.
Mondelez, created in 2012 when Kraft split into two public companies, will upgrade seven production lines in the Chicago facility that will continue to make Mini Chips Ahoy and Cheese Nips, among other products.
Mondelez has other facilities in the Chicago area: a plant in Naperville that makes Triscuit, a plant in the Rockford area that makes chewing gum and offices in Deerfield.
Profit: Net income fell to $406 million, or 25 cents per share, from $622 million, or 36 cents per share over the same period last year. Adjusted earnings per share, which excludes factors such as restructuring costs, increased by more than 37 percent to 47 cents, above analysts' forecast of 39 cents.
Revenue: Revenue was down 9.2 percent to $7.66 billion but was slightly higher than the average forecast of $7.5 billion. The company said it was hurt by the strong dollar.
Organic revenue, which doesn't take into account acquisitions and currency rate fluctuations, rose 4.3 percent as the company raised prices. Organic revenue grew 9.7 percent in emerging markets while developed markets saw an increase of nearly 1 percent.
Snacks account for nearly 85 percent of the revenue, up from 75 percent.
Coffee business: Under the deal with D.E. Master Blenders 1753 completed earlier this month, Mondelez received $4.2 billion and retained a nearly 44 percent stake in the new Jacobs Douwe Egberts company. Executives from Netherlands-based D.E. Master Blenders, which used to be part of Sara Lee, will lead Jacobs Douwe Egberts.
Looking ahead: Mondelez adjusted its financial forecast to a targeted organic revenue growth of at least 3 percent in 2015, up from a previous forecast of 2 percent.
Quote you on that: "With the creation of the coffee joint venture now complete, our portfolio is focused even more on snacks. In addition, we're continuing to make excellent progress driving supply chain productivity and overhead cost reductions to deliver top-tier margin expansion and earnings growth," Mondelez International CEO Irene Rosenfeld said in a statement.
Stock moves: The stock closed Thursday up more than 5 percent, at $45.27.
Alejandra Cancino contributed.
lvivanco@redeyechicago.com
