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Petya Malice Affects Mondelez's (MDLZ) Q2 Revenue Growth

Food and beverage company Mondelez International, Inc. MDLZ stated that a global cyber attack which wreaked havoc across Europe and the U.S. at the end of June will impact its revenues in the second quarter.

While the full financial impact of the attack is yet to be assessed, the company estimates that its second-quarter revenue growth would be reduced by 3% as a result of this issue. Additionally, the company expects to incur incremental one-time costs related to the attack in the second and third quarter of 2017.

What’s the Fuss About?

The ransomware called “Petya” locks an infected computer, and demands the computer's administrator to pay $300 worth of the bitcoin to regain control of them.  

It is to be noted that Mondelez is one of the companies’ that was severely impacted by the latest attack. In fact, Mondelez revealed that the company’s shipping and invoicing was disrupted during the last four days of the second quarter, given the timing of this global attack.

Notably, in few of the markets, the company has permanently lost some of its revenues due to holiday feature timing. Even so, it anticipates recognizing the bulk of these delayed shipments in its third quarter results.

Meanwhile, Mondelez reaffirmed its full-year organic revenue outlook of "at least 1% growth." Also, the company stated that its underlying margin progress continues to be in line with its outlook of mid-16% for the full year.

Bottom Line

Mondelez’s shares have lost 6.6% in the last one year as compared to of the Zacks categorized Food-Miscellaneous/Diversified industry’s decline of 14.2%.

The company is making good advancement in restoring systems across the enterprise and majority of the affected systems are now up and running again. However, Mondelez has been witnessing sluggish sales results ever since it split from Kraft Foods due to global snacking category slowdown. The negative impact on revenue growth, given the recent cyber attack, is thus an added cause of concern.

Zacks Rank & Stocks to Consider

Mondelez currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in this sector include Nomad Foods Ltd. NOMD, Aramark ARMK and SUPERVALU Inc. SVU. While Nomad Foods sports a Zacks Rank #1 (Strong Buy), Aramark and SUPERVALU carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Nomad Foods’ 2017 earnings moved up 17.9%, over the past 60 days. Moreover, for 2017, earnings per share (EPS) is expected to improve 7.6%.

Aramark's earnings met/surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 4.45%. Meanwhile, for fiscal 2017, EPS is projected to witness a rise of 13%.

The Zacks Consensus Estimate for SUPERVALU’s 2017 earnings climbed 2.9%, over the past 60 days. Meanwhile, for fiscal 2017, EPS is expected to grow a solid 19%.

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