Earnings

Mondelez Q2 Surges On Strong Snack Sales

Mondelez, one of the world’s leading snack manufacturers, whose portfolio includes Oreo cookies and Cadbury chocolates, reported better-than-expected earnings growth in the second quarter, with strong performance across most of its business segments.

Mondelez reported that second-quarter earnings rose 15 percent to 56 cents a share on an adjusted basis, beating Wall Street analysts’ estimates. Net income fell to $323 million, or 22 cents a share, compared with $498 million, or 32 cents, a year ago, while revenue grew 2.1 percent to $6.1 billion for the quarter.

Dirk Van de Put, chief executive of Mondelez, told analysts that the company had strong topline growth and double digit earnings-per-share growth, and has a broad geographic footprint. He added that much of its business is from overseas and emerging markets, as a majority of its revenue comes from foreign sales.

The company also announced that CFO Brian Gladden is leaving the firm and will be replaced by Luca Zaramella, starting Aug. 1.

Late in the quarter, Mondelez completed its acquisition of Tate’s Bake Shop. In early July, the company also completed the acquisition of its stake in the Keurig Dr. Pepper business, in which it owns 13.8 percent.

Officials said the company’s eCommerce platform continues to grow in China, in part due to gifting and personalization.

Van de Put told analysts that there are two areas involving service levels that the company needs to keep its eye on for the rest of the year in North America. He said the supply chain, one of the key areas the company needs to work on, has shown some good customer results. Secondly, the company has shown some improvement in its direct-store delivery system.

“It remains, however, a system that still has some old plants in there, which are a bit finicky, so we feel good – but we need to keep confirming for the rest of the year that we have things under control, so we’re a bit cautious,” he noted.

Gladden cited the increasing price of crude oil as affecting the company in some parts of the supply chain, but the company has hedged against that. He noted that there will be some inflationary pressures in other parts of the supply chain over the next couple of years, citing logistics, packaging and even labor costs in some parts of the world.

The company was one of several U.S. firms hit hard during the Petya ransomware attack in June 2017, which cost the company tens of millions of dollars.

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