Mondelez Profit Soars On Gain, Cuts FY Revenue Outlook

(RTTNews) - Mondelez International Inc. (MDLZ), the snacks business split from Kraft Foods, Wednesday reported a surge in profit for the third quarter, driven largely by revenue growth and a special tax gain.

Moving ahead, Mondelez, the maker of Oreo biscuits and Cadbury's chocolate, lifted its earnings guidance for the full year, but lowered its organic revenue outlook.

Mondelez, the snack business spun off from Kraft Foods, said revenues for the quarter improved 1.8 percent to $8.47 billion from $8.33 billion last year. Fourteen Wall Street analysts polled by Thomson Reuters expected revenues of $8.56 billion for the quarter.

Organic revenues increased 5.3 percent.

Revenue growth mainly reflects performance from emerging markets, led by gains of mid-to-high teens in Russia, India and Brazil. Meanwhile, sales from China dropped double-digits due soft macro economic conditions. Developed markets grew 1.8 percent as North America, Europe and Asia Pacific all posted low-single digit gains.

Chief Executive Irene Rosenfeld said, "Weak biscuit performance in China, continued headwinds from coffee pricing and slower global category growth, however, led to revenue growth below our expectations."

Gross margin for the third quarter dropped to 37.1 percent from 37.5 percent last year, but operating margin improved to 14.9 percent from 10.1 percent last year.

Deerfield, Illinois-based Mondelez' third-quarter profit rose to $1.02 billion or $0.57 per share from $652 million or $0.36 per share in the same period last year. Adjusted earnings for the quarter rose to $1.12 per share from $1.03 per share last year.

On average, 19 analysts expected earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.

Results for the third quarter includes a $336 million favorable impact from the reversal of an indemnity accrual related to the 2010 acquisition of Cadbury.

Mondelez was formed when the original parent entity Kraft Foods Global Inc. split into two companies last year, with its North American grocery business called Kraft Foods Group Inc. (KRFT), and international snacks business-- Mondelez.

Looking ahead to fiscal year 2013, the company now expect earnings in the range of $1.57 to $1.62 per share, up from a prior estimate of $1.55 to $1.60 per share. Analysts currently expect full-year earnings of $1.55 per share.

Mondelez however, lowered its full-year organic net revenue growth outlook to about 4 percent from its previous estimate of "the low end" of 5 to 7 percent, to reflect the impact of weak biscuit sales in China, continued lower coffee prices and slower global growth.

MDLZ closed Wednesday at $33.44, on the Nasdaq. The stock dropped $0.01 or 0.03% in after-hours trade.