Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Who Had the More Savory Quarter: Kraft or Mondelez?

Kraft Foods Group (NASDAQ: KRFT  ) and Mondelez International (NASDAQ: MDLZ  ) recently released first-quarter earnings. Here's what you need to know about each of the company's results and who fared better.

Earnings growth
Kraft served up first-quarter profits of $0.85 per share, up 12% from the year-ago period. The maker of Oscar Mayer, Capri Sun, and Velveeta has not provided guidance for full-year 2014 EPS, but consensus estimates come in at roughly $3.17. Meanwhile, Mondelez reported earnings of $0.39 per share for the first quarter, up 17% from the year-ago period. The maker of Oreo cookies and Cadbury chocolates is targeting adjusted full-year 2014 EPS up double digits over last year. 

Sales growth
Kraft's revenue fell 3.3% in the first quarter, compared to 2.1% growth during the same quarter last year. The packaged foods powerhouse dished up $4.4 billion in sales for the quarter, down from $4.5 billion for the year-ago quarter. Quarterly sales declines were due to the timing of Easter-related shipments versus the prior year as well as softness in sales of ready-to-eat Jell-O desserts, cold cuts, and bacon. Kraft has not provided guidance for full-year 2014 sales, but it's estimated at $18.58 billion. Meanwhile, Mondelez posted revenue growth of 2.8% in the first quarter, down 1.2% from the year-ago period. Mondelez's "power brands," which include Oreo and Chips Ahoy! cookies and Cadbury chocolate, grew 4.8% for the quarter. Mondelez expects full-year 2014 revenue growth to come in around 4%.

Improvement opportunities
Confined to North America for its sales, Kraft has focused on profitability metrics like free cash flow and return on invested capital ever since its October 2012 breakup from Mondelez. During the first quarter, the mac-and-cheese maker posted $175 million in free cash flow, up 19% from the year-ago quarter. Kraft posted an impressive $1.5 billion in free cash flow for full-year 2013. Yet while this figure reflected improved inventory and payables management, $600 million of it was attributed to the impact of pension plan contributions. 

Global snack-food maker Mondelez derives 40% of sales from developing markets, but it's vital to the long-term success of the company for this percentage to grow. For the first quarter, Mondelez posted 6.7% revenue growth from emerging markets, led by solid performance in Brazil, Russia, Turkey, and Egypt. But this figure was down substantially from the 9.3% emerging-markets revenue growth during the year-ago quarter. The snack-food maker has some work to do in order to achieve its long-term target of double-digit growth in these key markets.

Foolish takeaway
When looking at last quarter's results, it appears Mondelez can claim sweet victory in both earnings and revenue growth. As Mondelez spins off its coffee business and concentrates on its snacks and sweets, the company boasts ample long-term growth opportunities. But Kraft continues to cut costs and post impressive free cash flow. Stay tuned in coming quarters to see how these packaged foods giants stack up against each other.  

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Read/Post Comments (0) | Recommend This Article (2)

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: 2956008, ~/Articles/ArticleHandler.aspx, 9/4/2015 10:41:31 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...

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.

Today's Market

updated Moments ago Sponsored by:
DOW 16,147.24 -227.52 -1.39%
S&P 500 1,929.76 -21.37 -1.10%
NASD 4,697.28 -36.22 -0.77%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
KRFT $0.00 Down +0.00 +0.00%
Kraft Foods, Inc. CAPS Rating: ****
MDLZ $42.68 Down -0.57 -1.31%
Mondelez Internati… CAPS Rating: ****