Mondelez Q3 Profit Beats Estimates; Reaffirms 2015 Outlook

(RTTNews) - Mondelez International, Inc. (MDLZ) reported that its third-quarter adjusted EPS was flat to prior year on a constant-currency basis as the company's strong operating performance was offset by dilution related to the recently created coffee joint venture as well as cycling an unusually low effective tax rate in the prior-year quarter. Adjusted net income to company was $678 million or $0.42 per share, for the quarter. Analysts polled by Thomson Reuters expected the company to report profit per share of $0.41. Analysts' estimates typically exclude special items.

Adjusted Operating Income margin expanded 170 basis points to 14.1 percent. The company significantly stepped up advertising and consumer support, especially behind its Power Brands, and continued to reduce overhead costs as a percent of revenue.

"We delivered strong margin expansion in the third quarter by progressing our transformation agenda in a volatile and challenging macroeconomic environment," said Irene Rosenfeld, Chairman and CEO.

Third-quarter net earnings attributable to company was $7.27 billion or $4.46 per share compared to $899 million or $0.53 per share, last year.

Net revenues were $6.85 billion compared to $8.34 billion, a year ago. Analysts expected revenue of $6.81 billion for the quarter. On a reported basis, net revenues were down 17.8 percent, including a negative 13.6 percentage point impact from currency and a negative 9.3 percentage points from the coffee business transactions. Organic Net Revenue increased 3.7 percent, as the company raised prices to recover currency-driven input cost inflation. For 2015, the company continues to expect; double-digit growth on a constant currency basis in adjusted EPS; organic Net Revenue Growth of 3%; and Adjusted Operating Income Margin of approximately 14%. The company noted that it estimates foreign exchange translation to reduce 2015 net revenue growth by approximately 13 percentage points and Adjusted EPS by approximately $0.336 due to the strengthening of the U.S. dollar versus other currencies.

For 2016, the company reaffirmed its outlook for adjusted operating income margin target of 15 percent to 16 percent.

Mondelez International also announced that it has named Mark Clouse, to the newly created position of Chief Commercial Officer, and Tim Cofer, as Chief Growth Officer, as the company continues to sharpen its focus on cost savings, growth and commercial execution. The changes become effective in January 2016. Concurrent with these changes, the company announced that Maurizio Brusadelli will assume the role of President of Asia Pacific; Dave Brearton, EVP, Strategic Initiatives, will retire at year-end; and Tracey Belcourt, EVP, Strategy, will leave the organization.