Mondelez Stock: An Earnings Preview

Mondelez International (NASDAQ: MDLZ  ) will report earnings after the market closes on Wednesday. Here's what you need to watch for in the company's results.

Expectations
The first issue that needs to be addressed is whether the global snack-food giant met Wall Street's expectations. Analysts peg profits for Mondelez at $0.34 per share this quarter. The company reported EPS of that same amount in Q1 of this year. The maker of Oreo, Chips Ahoy, and Cadbury reported nearly $18 billion in second-quarter sales last year, and approximately $35 billion for the full-year 2012. 

Organic growth
Mondelez's revenues increased 3.8% in Q1 2013, driven by volume gains of 2.5%, and pricing improvements of 1.3%. The company's "power brands,, including Milka chocolates, belVita biscuits, and Tang beverages, grew nearly double the company rate. The chocolatier expects its full-year 2013 organic net revenue growth outlook to come in at the low end of its 5% to 7% target.

In the October 2012 breakup of Kraft Foods, Kraft Foods Group (NASDAQ: KRFT  ) spun off from the parent company, which changed its name to Mondelez International (NASDAQ: MDLZ  ) . Mondelez took the high-growth global snack-food portfolio, while Kraft received the more sluggish North American grocery business. Since the corporate divorce, Mondelez's stock has returned stockholders roughly 15%, in line with the performance of both the consumer staples sector and the overall stock market. Meanwhile, Kraft's stock has impressively returned more than twice that amount to its shareholders. 

Performance in developing markets
More middle-class citizens across the globe are developing Western-style snacking habits, increasing worldwide snack-food consumption. It's expected to grow 7% annually by 2015. Mondelez and its rivals are aggressively pursuing growth in untapped emerging markets, where the Illinois-based company currently obtains more than 40% of sales. Revenues derived from these markets grew more than 9% for Mondelez in the first quarter, led by noteworthy gains in Brazil, China, and India. 

But chocolate rival Hershey (NYSE: HSY  ) is gaining serious ground in these hotly contested geographic markets. It recently announced second-quarter revenue growth of 6.7% compared to a year earlier, with strong gains in China, Mexico, and Brazil. These strong results endorse Hershey's similar strategy of focusing investments in key markets, especially Asia and Latin America. The maker of Twizzlers, Reese's, and Kit Kat also upped its full-year sales outlook.

Foolish takeaway
When Mondelez reports earnings on Wednesday, I'll be looking to see what type of organic growth the company gained in Q2, and whether it's on pace to meet its yearly revenue target. In particular, I'll be observing if and how Mondelez grew revenues in key emerging markets.

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