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Shares of Mondelez International, Inc. (MDLZ - Free Report) grew 2.5% after the trading session on Apr 27, following impressive first-quarter 2023 numbers. The top and the bottom line increased year over year and beat the Zacks Consensus Estimate. Backed by stellar year-to-date performance, management raised its 2023 organic net revenue and earnings outlook.
Quarterly results gained from ongoing pricing actions to offset cost inflation and volume gains. The company witnessed broad-based demand in developed and emerging markets, with strength in baked snacks, chocolate and biscuit categories and brands.
Shares of this Zacks Rank #3 (Hold) company have gained 13.9% in the past three months compared with the industry’s growth of 4.8%.
Mondelez International, Inc. Price, Consensus and EPS Surprise
Adjusted earnings were 89 cents per share, which increased 9.9% year over year and 17.3% on a constant-currency (cc) basis. The metric surpassed the Zacks Consensus Estimate of 80 cents per share and our estimate of 78 cents a share. The year-over-year upside was mainly backed by solid operating gains, reduced shares outstanding and lower taxes. These were somewhat offset by increased interest expenses.
Net revenues advanced 18.1% year over year to $9,166 million. The metric beat the Zacks Consensus Estimate of $8,432.1 million and our estimate of $ $8,016.6 million. The uptick was driven by strong organic net revenue growth of 19.4%, and increased sales from Chipita, Clif Bar and Ricolino buyouts, somewhat negated by currency headwinds. Favorable volumes and pricing contributed to organic net revenues.
Revenues from emerging markets increased 21.4% to $3,598 million, while rising 25.2% on an organic basis. Revenues from developed markets moved up 16% to $5,568 million, while increasing 15.8% on an organic basis.
Region-wise, revenues in Latin America; Asia, the Middle East & Africa; Europe; and North America increased 46.6%, 3.9%, 12.7% and 26.8% year over year, respectively. On an organic basis, revenues increased 39%, 13.8%, 18.9% and 17.3% in the above-mentioned regions, respectively.
The adjusted gross profit increased $547 million at cc. The adjusted gross profit margin contracted 170 bps to 37.1%, thanks to increased raw material and transportation costs. These were somewhat negated by pricing.
Mondelez’s adjusted operating income rose $285 million at cc. The adjusted operating income margin contracted 60 bps to 17.2% due to input cost inflation. This was somewhat countered by SG&A leverage and favorable pricing.
Image Source: Zacks Investment Research
Other Financials
The company ended the quarter with cash and cash equivalents of $1,917 million, long-term debt of $18,556 million and total equity of $28,274 million. MDLZ provided $1,123 million of net cash from operating activities as of Mar 31, 2023. Free cash flow was $900 million for the same period. Management expects a free cash flow of more than $3.3 billion for 2023.
The company returned $900 million to shareholders in cash dividends and share repurchases during the reported quarter.
Guidance
Mondelez now expects 2023 organic net revenues growth of more than 10% compared with growth of 5-7% projected earlier. The raised outlook takes into account the impressive year-to-date performance.
Management now anticipates adjusted earnings per share (EPS) growth on a cc basis of over 10%. The company had earlier expected the metric to grow in high-single digits. Currency movements are likely to affect net revenues by nearly 2% and adjusted EPS by 9 cents in 2023
Lamb Weston, which operates as a frozen potato product company, currently sports a Zacks Rank #1 (Strong Buy). LW has a trailing four-quarter earnings surprise of 47.6%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and earnings suggests increases of 29.6% and 116.8%, respectively, from the year-ago reported number.
General Mills, a branded consumer food company, currently carries a Zacks Rank #2 (Buy). GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
The Zacks Consensus Estimate for General Mills’ current fiscal-year sales and earnings suggests growth of 6.3% and 7.4%, respectively, from the year-ago reported figures.
Conagra Brands, operating as a consumer-packaged goods food company, currently carries a Zacks Rank #2. CAG has a trailing four-quarter earnings surprise of 13.2%, on average.
The Zacks Consensus Estimate for Conagra Brands’ current fiscal-year sales and earnings suggests improvements of 7.1% and 16.5%, respectively, from the year-ago reported number.
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Mondelez (MDLZ) Beats Q1 Earnings Estimates, Ups 2023 View
Shares of Mondelez International, Inc. (MDLZ - Free Report) grew 2.5% after the trading session on Apr 27, following impressive first-quarter 2023 numbers. The top and the bottom line increased year over year and beat the Zacks Consensus Estimate. Backed by stellar year-to-date performance, management raised its 2023 organic net revenue and earnings outlook.
Quarterly results gained from ongoing pricing actions to offset cost inflation and volume gains. The company witnessed broad-based demand in developed and emerging markets, with strength in baked snacks, chocolate and biscuit categories and brands.
Shares of this Zacks Rank #3 (Hold) company have gained 13.9% in the past three months compared with the industry’s growth of 4.8%.
Mondelez International, Inc. Price, Consensus and EPS Surprise
Mondelez International, Inc. price-consensus-eps-surprise-chart | Mondelez International, Inc. Quote
Quarter in Detail
Adjusted earnings were 89 cents per share, which increased 9.9% year over year and 17.3% on a constant-currency (cc) basis. The metric surpassed the Zacks Consensus Estimate of 80 cents per share and our estimate of 78 cents a share. The year-over-year upside was mainly backed by solid operating gains, reduced shares outstanding and lower taxes. These were somewhat offset by increased interest expenses.
Net revenues advanced 18.1% year over year to $9,166 million. The metric beat the Zacks Consensus Estimate of $8,432.1 million and our estimate of $ $8,016.6 million. The uptick was driven by strong organic net revenue growth of 19.4%, and increased sales from Chipita, Clif Bar and Ricolino buyouts, somewhat negated by currency headwinds. Favorable volumes and pricing contributed to organic net revenues.
Revenues from emerging markets increased 21.4% to $3,598 million, while rising 25.2% on an organic basis. Revenues from developed markets moved up 16% to $5,568 million, while increasing 15.8% on an organic basis.
Region-wise, revenues in Latin America; Asia, the Middle East & Africa; Europe; and North America increased 46.6%, 3.9%, 12.7% and 26.8% year over year, respectively. On an organic basis, revenues increased 39%, 13.8%, 18.9% and 17.3% in the above-mentioned regions, respectively.
The adjusted gross profit increased $547 million at cc. The adjusted gross profit margin contracted 170 bps to 37.1%, thanks to increased raw material and transportation costs. These were somewhat negated by pricing.
Mondelez’s adjusted operating income rose $285 million at cc. The adjusted operating income margin contracted 60 bps to 17.2% due to input cost inflation. This was somewhat countered by SG&A leverage and favorable pricing.
Image Source: Zacks Investment Research
Other Financials
The company ended the quarter with cash and cash equivalents of $1,917 million, long-term debt of $18,556 million and total equity of $28,274 million. MDLZ provided $1,123 million of net cash from operating activities as of Mar 31, 2023. Free cash flow was $900 million for the same period. Management expects a free cash flow of more than $3.3 billion for 2023.
The company returned $900 million to shareholders in cash dividends and share repurchases during the reported quarter.
Guidance
Mondelez now expects 2023 organic net revenues growth of more than 10% compared with growth of 5-7% projected earlier. The raised outlook takes into account the impressive year-to-date performance.
Management now anticipates adjusted earnings per share (EPS) growth on a cc basis of over 10%. The company had earlier expected the metric to grow in high-single digits. Currency movements are likely to affect net revenues by nearly 2% and adjusted EPS by 9 cents in 2023
Solid Consumer Staple Picks
Some better-ranked consumer staple stocks are Lamb Weston (LW - Free Report) , General Mills (GIS - Free Report) and Conagra Brands (CAG - Free Report) .
Lamb Weston, which operates as a frozen potato product company, currently sports a Zacks Rank #1 (Strong Buy). LW has a trailing four-quarter earnings surprise of 47.6%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and earnings suggests increases of 29.6% and 116.8%, respectively, from the year-ago reported number.
General Mills, a branded consumer food company, currently carries a Zacks Rank #2 (Buy). GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
The Zacks Consensus Estimate for General Mills’ current fiscal-year sales and earnings suggests growth of 6.3% and 7.4%, respectively, from the year-ago reported figures.
Conagra Brands, operating as a consumer-packaged goods food company, currently carries a Zacks Rank #2. CAG has a trailing four-quarter earnings surprise of 13.2%, on average.
The Zacks Consensus Estimate for Conagra Brands’ current fiscal-year sales and earnings suggests improvements of 7.1% and 16.5%, respectively, from the year-ago reported number.