A stronger dollar bit into Mondelez’s results for the quarter, with sales in its largest markets — Europe and North America — slipping despite strong gains in Latin America, although revenue still managed to top Wall Street’s expectations.
The maker of Cadbury chocolates and Oreo cookies said that net revenue decreased 0.6 per cent versus the prior year to $6.4bn for the three months ending March 31. It was still just ahead of the $6.37bn that analysts surveyed by Bloomberg had been expecting.
The company said the revenue decline was driven by currency headwinds, as the dollar has performed solidly since the election of President Donald Trump in November. Revenue in Europe slipped the furthest, declining 3.4 per cent versus the prior year, and North America dipping 1.6 per cent. Latin America, on the other hand, rose 11.4 per cent during the same time, and sales in emerging markets were up 4.2 per cent versus a 3.3 per cent fall in developed markets.
Diluted earnings per share for the quarter, however, were up 17 per cent over the prior year to 41 cents, a penny under the 42 cents analysts had expected. Net earnings attributable to the company clocked in at $630m, compared to the $642.3m Wall Street had expected.
Adjusted earnings per share, however, beat targets, up 6 per cent on a constant currency basis to 53 cents and beating the 50 cents analysts predicted.
Irene Rosenfeld, the company’s chairman and chief executive, called it a “solid start to the year despite challenging market conditions”, adding: “We delivered both top-line organic growth and strong margin expansion in the quarter, while also making critical investments for our future. We remain confident in and committed to our balanced strategy for both top- and bottom-line growth, continuing to focus on what we can control to deliver long-term value creation for our shareholders.”
The company reaffirmed its forecast for 1 per cent organic net revenue growth during the year and double-digit adjusted EPS growth on a constant-currency basis. It also expects currency translation to reduce net revenue growth by about 1 per cent.
Mondelez is among several major global food companies that have been tossed back and forth this year amid speculation about which companies might be the next target for a takeover or mega-merger. Its shares, down 1.8 per cent over the past 12 months, were up 2.5 per cent in after-hours trading on Tuesday.