Post Earnings Coverage as Mondelez Delivers Earnings Beat

Upcoming AWS Coverage on Hershey Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 4, 2016 / Active Wall St. announces its post-earnings coverage on Mondelez International, Inc. (NASDAQ: MDLZ). The company posted its financial results for the third quarter fiscal 2016 on October 26, 2016. The maker of Oreo cookies and Trident gum reported earnings that topped market expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Mondelez International’s competitors within the Confectioners space, The Hershey Co. (NYSE: HSY), announced on October 28, 2016, its sales and earnings results for the third quarter ended October 2, 2016. AWS will be initiating a research report on Hershey in the coming days.

Today, AWS is promoting its earnings coverage on MDLZ; touching on stock like HSY. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=MDLZ

http://www.activewallst.com/registration-3/?symbol=HSY

Earnings Reviewed

For the three months ended on September 30th, 2016, Mondelez reported net income of $548 million, or $0.35 per share, down from $7.27 billion, or $4.46 per share, for the same period last year. The decline in earnings was attributed to coffee business transactions conducted in Q3 2015. On an adjusted basis, the company reported earnings of $0.52 per share, beating analysts’ estimates of $0.43 per share. Revenue during the reported quarter was $6.40 billion, down 6.6% from $6.85 billion in Q3 2015 and below the $6.45 billion analysts forecasted. The decline in net revenue was attributed to currency headwinds and deconsolidation of the company’s Venezuelan operations. Organic Net Revenue increased 1.1% driven by continued improvement in overall volume/mix trends and pricing to recover currency-driven input costs in inflationary markets.

Operating Statistics

During Q3 2016, Mondelez reported gross profit margin of 38.9%, down 10 basis points from the year ago period, driven primarily by higher Restructuring Program costs and partially offset by the deconsolidation of the company’s Venezuelan operations. Adjusted gross profit margin for Q3 2016 was 39.9%, up by 30 basis points. For Q3 2016, the company’s operating income margin was 11.0%, down 103%, while adjusted operating income margin expanded 220 basis points to 15.8%.

Sales Numbers

Mondelez noted that in North America, it delivered another strong quarter of margin expansion, as adjusted OI margins improved by 220 basis points, primarily driven by continued overhead reductions and good net productivity. On the top-line, its North American business grew about 1%, driven by solid volume/mix. The company reported strong margin growth from Europe with adjusted OI margin up 230 basis points to 19.7%. Organic net revenue was up 1%, primarily due to solid vol/mix. The company reported dynamics deteriorated in its EMEA region market, especially in the Middle East, as the Gulf States and Saudi Arabia deal with the ongoing pressures resulting from persistent low oil prices. As a result, organic revenue declined just over 1%, and adjusted OI margin decreased 100 basis points, driven by lower volume leverage. During Q3 2016, Mondelez’s adjusted operating income margins grew 340 basis points to 13.4% in the Asia/Pacific region, driven by improved overheads and good productivity. Organic revenue increased 1.5%, primarily due to vol/mix improvements.

In Latin America, adjusted operating income margin increased 540 points to over 15%, primarily driven by the VAT-related settlement in the quarter. Excluding the settlement, margins still posted solid growth. Organic net revenue increased nearly 3%, led by Mexico and Argentina.

Mondelez noted that category growth continued to slowdown in Q3 2016 and is now at 2.6% on a year-to-date basis. The company’s biscuits business grew nearly 2%, with strength in the UK, the US, and Germany. The launch of Chips Ahoy Thins in the US also fueled the category. Chocolate grew 2%, driven by solid results in the UK, Germany, and India.

Financing Activity

During Q3 2016, Mondelez generated approximately $500 million of free cash flow. During the reported quarter, the company returned more than $700 million of capital to shareholders, with a total of $2.6 billion in capital return through nine months. The company has repurchased approximately $1.8 billion of shares at an average price of $41.64, and it has also increased its share repurchase target and now expects to repurchase approximately $500 million in Q4 2016.

Guidance

For FY16, Mondelez currently expects Organic Net Revenue growth of approximately 1.6%, in-line with a year-to-date growth. The company continues to expect adjusted operating income margin of 15% to 16%. Mondelez has increased its full-year adjusted EPS outlook and now projects growth of approximately 25% on a constant-currency basis.

Stock Performance

On Thursday, Mondelez International’s stock closed the trading session at $43.31, falling 1.55% from its previous closing price of $43.99. A total volume of 6.94 million shares have exchanged hands. MDLZ’s stock price advanced 0.65% in the last month and 0.54% in the past three months. The company’s shares are trading a PE ratio of 9.32 and have a dividend yield of 1.75%.

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