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Mondelez (MDLZ) Q2 Earnings & Revenues Top, View Intact

Mondelez International, Inc. MDLZ reported second-quarter 2017 results, with both earnings and revenues surpassing the Zacks Consensus Estimate.

Second-quarter adjusted earnings of 48 cents per share beat the Zacks Consensus Estimate of 46 cents by 4.3%.

Adjusted earnings grew 19%, primarily driven by operating gains and lower divestiture-related costs.

Sales Details

Net revenue declined 5% year over year to $5.99 billion due to negative currency impact and global cyber attack. Emerging markets’ net revenues decreased 1.5% while developed markets reported revenue declined 7.1%. Power Brands also witnessed 3% decline in revenues.

Regionally, Asia, Middle East & Africa, Europe, and North America registered a respective 3.6%, 5.3% and 8.5% decline in revenues. However, Latin America’s revenues increased 0.6%.

Reported total revenues exceeded the Zacks Consensus Estimate of $5.95 billion.

Organic revenues however declined 2.7%, softer than the 0.6% growth seen last quarter. The downside was primarily due to the global cyber attack, which wreaked havoc across Europe and the U.S. at the end of June.

Pricing increased 1.1%, same as in the previous quarter. Volume mix decreased 3.8%, wider than the 0.5% decline in the last quarter.

Mondelez International, Inc. Price, Consensus and EPS Surprise


Mondelez International, Inc. Price, Consensus and EPS Surprise | Mondelez International, Inc. Quote


Adjusted gross margin decreased 10 basis points (bps) year over year to 40%, 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 15.8% on the back of lower selling, general and administrative costs.


Mondelez reported cash and cash equivalents of $1.4 billion as on Jun 30, 2017, down from $1.74 billion at the end of 2016.

The company returned $900 million of capital to shareholders through share repurchases and dividends in the second quarter.

Mondelez also announced a quarterly cash dividend of 22 cents per share, reflecting an increase of 16%.

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.

Peer Releases

Dr Pepper Snapple Group Inc. DPS reported second-quarter 2017 adjusted earnings per share of $1.25 missing the Zacks Consensus Estimate of $1.28 by 2.3%. Earnings were flat on a year-over-year basis.

The Hershey Company’s HSY second-quarter adjusted earnings per share of $1.09 beat the Zacks Consensus Estimate of 91 cents by 19.8%. Earnings also increased from the year-ago profit level of 85 cents by 28.2%.

The Procter & Gamble Company PG, popularly known as P&G, reported fourth-quarter fiscal 2017 core earnings of 85 cents per share beating the Zacks Consensus Estimate of 78 cents by 9%. The bottom line also increased 8% from the prior-year quarter.

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