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Mondelez International, Inc. Earnings: What You Need to Know

Mondelez International (NASDAQ: MDLZ  ) reported earnings after the market closed on Wednesday. Here's what you need to know about the company's recent results.

Expectations disappoint, but sweeter outlook for 2014
Mondelez reported earnings of $0.42 per share for the fourth quarter, which was below Wall Street's expected Q4 profits of $0.44 per share. The maker of Chips Ahoy! posted full-year 2013 EPS of $1.51, which came up short of its $1.57 to $1.62 target range. However, Mondelez's outlook for 2014 was more optimistic. The company called for adjusted earnings in the range of $1.73 to $1.78 a share. 

Slowing organic growth
Mondelez posted an organic net revenue increase of 2.5% in the fourth quarter, down from increases of 5.3% in Q3 and 3.8% in each of the first two quarters of 2013. Management had expected Q4 revenues to be down due largely to slowing GDP growth in China. The chocolatier anticipated its full-year 2013 organic net revenue growth to come in at 4%. But the company came up slightly short, delivering 3.9% growth. Mondelez's "power brands" were up 4.5% in Q4 and 6.5% for the full-year 2013, led by Oreo cookies, belVita biscuits, Cadbury chocolates, and Tassimo coffee.

Emerging markets remain primary focus
While Mondelez currently obtains more than 40% of sales from developing markets, it's crucial to the long-term success of the company for this percentage to grow. Revenues from emerging markets were up 8.8% for the full-year 2013, led by a 10% gain in BRIC markets. For the fourth quarter, the Illinois-based company posted 5.9% revenue growth from emerging markets, led by double-digit growth in India and solid performance in Russia and Brazil. Meanwhile, China declined considerably due to weak biscuit sales. 

Up until this quarter, revenues derived from emerging markets had steadily increased. Mondelez had posted 9.3% revenue growth in Q1 2013, 9.5% in Q2 2013, and 10.7% in Q3 2013. The company was starting to close in on its long-term target of double-digit growth in these markets. But this most recent quarter was a setback.

Meanwhile, rival chocolatier Hershey (NYSE: HSY  ) has been gaining serious ground in international markets. Outside of the U.S. and Canada, international net sales rose 16% in 2013. Last year, Hershey posted net sales up a combined 25% in China, Brazil, and Mexico. The maker of Kit Kat, Reese's, and Twizzlers is on track to achieve close to $1 billion of net sales in international markets by the end of 2014, endorsing its strategy of focusing investments in key markets like Latin America and Asia.

Foolish takeaway
Despite its near-term challenges, the snack-food giant boasts plenty of attractive long-term growth opportunities. Mondelez still holds a great deal of promise for the patient investor.

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Read/Post Comments (3) | Recommend This Article (1)

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.

  • Report this Comment On February 14, 2014, at 12:44 PM, pabaines wrote:

    Sorry,KIT-KAT is produced by Nestle not Hersheys.

    OREOs have only just ( Feb 2014 ) been launched in Brasil.

  • Report this Comment On February 14, 2014, at 2:15 PM, BradReeseCom wrote:

    Hi pabaines,

    In the United States, Kit Kat is manufactured by the non-union H.B. Reese Candy Company whose founder and chairman was my late grandfather.

    According to Advertising Age and Euromonitor International, for 2012 Kit Kat sales in the United States were $948 million:


    Brad Reese

  • Report this Comment On April 03, 2014, at 8:47 AM, EvaBrain wrote:

    Mondelēz aims to increase investments in emerging markets from $100 million in fiscal year 2013 to $200 million in fiscal year 2014, and then to $300 million in fiscal year 2015.Further will be describ here :

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Nicole Seghetti

Nicole is a contributing writer for The Motley Fool. She's worked as a financial advisor and planner for over a decade. Nicole holds an MBA from the University of the Pacific and a chemical engineering degree from Purdue University. She welcomes you to follow her on Twitter.

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