Mondeléz 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 in a recent statement. Analysts estimated 40 cents, on average. Sales fell 16 per cent to $6.46 billion, partly because of the sale of Mondeléz's 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 of a percentage point to 11.2 per cent.
Mark Clouse, the company’s chief commercial officer, is leaving Mondeléz to take over as CEO of Pinnacle Foods, Inc. next month, the companies said. Pinnacle started looking for a new CEO after Bob Gamgort announced that he was leaving to take over at Keurig Green Mountain. Mondeléz said that it doesn’t plan to name a new CCO.
Mondeléz’s organic revenue growth, which excludes the effects of acquisitions, divestitures and currency fluctuations, rose 2.1 per cent in the quarter, helped by higher pricing. Some of the company’s products remain popular, such as its Oreo cookies, which boosted sales 11 per cent to $3.54 billion last year.
The shares rose as much as 4.6 per cent to $44.46 in New York, the biggest gain since August. Mondeléz’s stock had dropped 5.2 per cent this year.
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