Mondelez International’s Profit Beats Estimates Due To Higher Pricing
Mondelez International Inc has reported a quarterly profit that edged past estimates, helped by higher pricing and cost cuts.
Mondelez had embarked on a cost cutting plan in 2014 to save about $1.5 billion per year by 2018, the effects of which are starting to show on the company's margins.
These cost saving efforts, along with higher pricing helped the company drive its adjusted gross margin up 110 basis points to 40.6% in the third quarter ended Sept. 30. Analysts on average had expected 39.94%, according to Refinitiv data.
"We performed well in the third quarter," commented Dirk Van de Put, chairman and CEO. "We continue to see good momentum in emerging markets, underpinned by solid volume growth and strong execution.
“We are beginning to deliver against our new long-term growth strategy by implementing a more agile innovation model and establishing a new commercial structure that will improve our consumer focus and drive greater local accountability, while igniting our global and local brand and innovation agendas."
However, Mondelez's sales in Europe, its biggest market, fell 3.3% to $2.36 billion, while sales in Latin America fell 14.8% to $774 million.
Net income attributable to the company rose to $1.19 billion, or 81 cents per share, in the third quarter, from $981 million, or 64 cents per share, a year earlier.
Excluding items, the company earned 62 cents per share. Net revenue fell 3.7% to $6.29 billion.