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Mondelez International, Inc. (MDLZ - Free Report) reported first-quarter 2017 results, with both earnings and revenues surpassing the Zacks Consensus Estimate. Cost-saving initiatives as well as good pricing mainly in Latin America helped the company post better-than-expected results.
Earnings Details
First-quarter adjusted earnings of 53 cents per share beat the Zacks Consensus Estimate of 50 cents by 6%.
On a constant currency basis, earnings grew 6%, primarily driven by operating gains.
Sales Details
Net revenue declined 0.6% year over year to $6.41 billion due to negative currency impact. Emerging markets’ net revenues grew 4.2% while developed markets reported lackluster results with revenue declining 3.3%.
Reported total revenues exceeded the Zacks Consensus Estimate of $6.37 billion by 0.7%.
Organic revenues inched up 0.6% (including Power Brands growth of 2.5%), same as the rate of increase in last quarter.
Many key markets, including Russia, Germany, Southeast Asia, and Mexico posted solid results. Again, India recovered faster than expected from the demonetization impact, delivering high single digit growth. In fact, barring North America, all regions delivered strong results.
Pricing increased 1.1%, same the rate of increase in the previous quarter. Volume mix decreased 0.5%.
Margins
Adjusted gross margin decreased 20 basis points (bps) year over year to 40.3% as strong net productivity and pricing gains were primarily offset by an unfavorable mix and higher input costs.
However, adjusted operating margin increased 90 bps year over year to 16.8% on the back continued reduction in overhead costs and supply chain productivity savings.
Financials
The company reported cash and cash equivalents of $1.31 billion as on Mar 31, 2017, down from $1.74 billion at the end of 2016.
The company returned $770 million of capital to shareholders through share repurchases and dividends in the first quarter.
2017 Guidance Reaffirmed
Organic net revenue is expected to increase 1% in 2017.
Adjusted operating margin is still expected in the mid 16% range. Mondelez remains on track to reach its 17–18% profit-margin goal by 2018.
Management expects adjusted earnings to increase at a double-digit rate on a constant-currency basis.
The Hershey Company’s (HSY - Free Report) earnings beat the Zacks Consensus Estimate, while sales missed the same in first-quarter 2017. The leading chocolate manufacturer also updated its expectations for 2017.
Pinnacle Foods, Inc. reported mixed first-quarter 2017 results. Adjusted earnings of 50 cents per share grew 25% from the year-ago quarter and beat the Zacks Consensus Estimate of 46 cents by 8.7%.
Upcoming Peer Release
The Kraft Heinz Company (KHC - Free Report) is scheduled to report first-quarter 2017 results on May 3 after the market close.
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Mondelez (MDLZ) Tops Q1 Earnings & Revenues, Margins Grow
Mondelez International, Inc. (MDLZ - Free Report) reported first-quarter 2017 results, with both earnings and revenues surpassing the Zacks Consensus Estimate. Cost-saving initiatives as well as good pricing mainly in Latin America helped the company post better-than-expected results.
Earnings Details
First-quarter adjusted earnings of 53 cents per share beat the Zacks Consensus Estimate of 50 cents by 6%.
On a constant currency basis, earnings grew 6%, primarily driven by operating gains.
Sales Details
Net revenue declined 0.6% year over year to $6.41 billion due to negative currency impact. Emerging markets’ net revenues grew 4.2% while developed markets reported lackluster results with revenue declining 3.3%.
Reported total revenues exceeded the Zacks Consensus Estimate of $6.37 billion by 0.7%.
Organic revenues inched up 0.6% (including Power Brands growth of 2.5%), same as the rate of increase in last quarter.
Many key markets, including Russia, Germany, Southeast Asia, and Mexico posted solid results. Again, India recovered faster than expected from the demonetization impact, delivering high single digit growth. In fact, barring North America, all regions delivered strong results.
Pricing increased 1.1%, same the rate of increase in the previous quarter. Volume mix decreased 0.5%.
Margins
Adjusted gross margin decreased 20 basis points (bps) year over year to 40.3% as strong net productivity and pricing gains were primarily offset by an unfavorable mix and higher input costs.
However, adjusted operating margin increased 90 bps year over year to 16.8% on the back continued reduction in overhead costs and supply chain productivity savings.
Financials
The company reported cash and cash equivalents of $1.31 billion as on Mar 31, 2017, down from $1.74 billion at the end of 2016.
The company returned $770 million of capital to shareholders through share repurchases and dividends in the first quarter.
2017 Guidance Reaffirmed
Organic net revenue is expected to increase 1% in 2017.
Adjusted operating margin is still expected in the mid 16% range. Mondelez remains on track to reach its 17–18% profit-margin goal by 2018.
Management expects adjusted earnings to increase at a double-digit rate on a constant-currency basis.
Mondelez currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Mondelez International, Inc. Price, Consensus and EPS Surprise
Mondelez International, Inc. Price, Consensus and EPS Surprise | Mondelez International, Inc. Quote
Peer Releases
The Hershey Company’s (HSY - Free Report) earnings beat the Zacks Consensus Estimate, while sales missed the same in first-quarter 2017. The leading chocolate manufacturer also updated its expectations for 2017.
Pinnacle Foods, Inc. reported mixed first-quarter 2017 results. Adjusted earnings of 50 cents per share grew 25% from the year-ago quarter and beat the Zacks Consensus Estimate of 46 cents by 8.7%.
Upcoming Peer Release
The Kraft Heinz Company (KHC - Free Report) is scheduled to report first-quarter 2017 results on May 3 after the market close.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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