Mondelez Profit Beats Estimates as Rosenfeld Trims Expensesby
Mondelez International Inc., the maker of Ritz crackers and Oreo cookies, posted first-quarter earnings that beat analysts’ estimates as cost cuts helped expand profit margins.
Profit rose to 48 cents a share, excluding some items, the Deerfield, Illinois-based company said Wednesday in a statement. Analysts estimated 40 cents, on average. Sales fell 16 percent to $6.46 billion, partly because of the sale of its coffee business. That topped analysts’ average projection of $6.42 billion.
Chief Executive Officer Irene Rosenfeld is pursuing $3 billion in expense reductions to help weather tepid economic growth in international markets, where the snacks giant generates most of its revenue. Amid pressure from a pair of activist investors in recent years, Rosenfeld has shifted production to lower-cost countries to streamline the business. The moves are showing some progress, with the company’s operating margin expanding 0.8 percentage point to 11.2 percent.
Mark Clouse, the company’s chief commercial officer, is leaving Mondelez to take over as CEO of Pinnacle Foods Inc. next month, the companies said Wednesday. Pinnacle started looking for a new CEO after Bob Gamgort announced he was leaving to take over at Keurig Green Mountain. Mondelez said it doesn’t plan to name a new CCO.
Mondelez’s organic revenue growth, which excludes the effects of acquisitions, divestitures and currency fluctuations, rose 2.1 percent in the quarter, helped by higher pricing. Some of the company’s products remain popular, such as its Oreo cookies, which boosted sales 11 percent to $3.54 billion last year.
The shares rose as much as 4.6 percent to $44.46 in New York, the biggest gain since August. Mondelez’s stock had dropped 5.2 percent this year through Tuesday.