Mondelez International, Inc.: An Earnings Preview

What you need to watch for in Mondelez's upcoming earnings release.

Feb 8, 2014 at 8:00AM

Mondelez International (NASDAQ:MDLZ) will report fourth-quarter earnings on 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 $0.44 per share this quarter. The company reported EPS of $0.41 per share for the third quarter. At that time, Mondelez raised its full-year 2013 EPS target range by $0.02 to $1.57-$1.62, reflecting the effects of some tax favorability. 

Organic growth
Mondelez's revenues increased 5.3% in Q3 2013, up from 3.8% in each of the first two quarters of the year. The company's two largest categories, biscuits and chocolate, drove third-quarter sales increases. The maker of Cadbury, Chips Ahoy!, and Oreo reported nearly $8.5 billion in sales last quarter and $35 billion for the full-year 2012. Management anticipates Q4 revenues to be down due largely to slowing GDP growth in China. The chocolatier expects its full-year 2013 organic net revenue growth to come in at 4%, below its initially targeted 5% to 7% range.


In the October 2012 breakup of Kraft Foods, Kraft Foods Group 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 split, Mondelez has performed more sluggishly. Its stock has returned 18%, underperforming both Kraft's 22% return and the S&P 500's 25%. 

Emerging markets performance
Mondelez continues to aggressively pursue growth in developing markets, where the company currently obtains roughly 40% of sales. Last quarter, Mondelez posted 10.7% revenue growth in emerging markets, up from 9.7% in Q2 and 9.4% in Q1. Accelerating revenues during the past several quarters are nearing Mondelez's long-term target of double-digit growth. Third-quarter revenues increased most notably for BRIC markets. Brazil, Russia, and India each posted growth in the mid to high teens. Meanwhile, weak performance in China, where recent investments didn't translate into category growth, tempered Q3 results. 

Foolish final thoughts
When Mondelez reports earnings on Wednesday, I'll be watching to see what type of organic growth the company achieved in the fourth quarter and whether it meets full-year EPS and revenue targets. I'll also be looking for if and how Mondelez grew revenues in crucial emerging markets, particularly BRIC nations.

The No. 1 way to LOSE your wealth without ever even knowing it...
You've fought hard to build wealth for you and your family. Yet one all-too-common pitfall could completely derail your dreams before you even know it. That's why a company The Economist hails as "an ethical oasis" has isolated five simple questions you must answer to ensure that your financial future is really secure.

Can you answer YES to all five of these eye-opening questions?
Click here to find out -- before it's too late!

Nicole Seghetti owns shares of Mondelez International. Follow her on Twitter @NicoleSeghetti. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information