Mondelez Stock: An Earnings Preview

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

Earnings expectations
The first issue that needs to be addressed is whether the global snack-food giant met Wall Street's expectations. Analysts tack profits for Mondelez at $0.40 per share this quarter. The company reported EPS of $0.37 per share for the second quarter. At that time, Mondelez reaffirmed its full-year 2013 adjusted EPS guidance of $1.55 to $1.60. 

Organic growth
Mondelez's revenues increased 3.8% in Q2 2013, driven by the company's two largest categories, biscuits and chocolate, which were up 8% and 6%, respectively. The company's "power brands" -- including belVita biscuits and Milka chocolates -- have grown more than double the company rate during the first half of 2013. The maker of Chips Ahoy, Oreo, and Cadbury reported nearly $8.6 billion in sales last quarter and $35 billion for the full-year 2012. The chocolatier expects its full-year 2013 organic net revenue growth 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. Mondelez retained the high-growth global snack-food portfolio, while Kraft received the slower-growing North American grocery business. Yet since the corporate divorce, Mondelez has been the more sluggish performer. Its stock returned 23%, underperforming both Kraft's impressive 31% return and the S&P 500's 25%. 

Developing markets performance
Mondelez is assertively pursuing growth in untapped emerging markets, where the company currently obtains more than 40% of sales. Last quarter, it posted 9.5% revenue growth in emerging markets. Revenues derived from these markets have accelerated during the past several quarters and are nearing Mondelez's long-term target of double-digit growth. Revenues grew most notably for BRIC markets, which were up nearly 13% during the second quarter, with Russia and Brazil posting especially strong growth. 

Foolish takeaway
When Mondelez reports earnings on Wednesday, I'll be looking to see what type of organic growth it achieved in the third quarter and whether it's on track to meet its yearly revenue target. I'll be especially interested in whether and how Mondelez grew revenues in crucial emerging markets.

More compelling stock research
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "
3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2708889, ~/Articles/ArticleHandler.aspx, 12/22/2014 6:32:23 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement