 "Oreo maker Mondelez's quarterly results sweetened by emerging markets")
By Richa Naidu and Uday Sampath Kumar
(Reuters) - Mondelez International Inc , the maker of Oreos and Chips Ahoy cookies, on Wednesday reported quarterly revenue that beat estimates, helped by higher demand for its snacks in developing markets, sending shares up 3%.
The company said it did not know how it would be affected by the coronavirus outbreak in China, which Mondelez said accounts for nearly 4.5% of its sales.
“It’s too early to tell what the effect of the coronavirus is going to be on our business. … We’re still in the middle of Chinese New Year,” Mondelez Chief Executive Dirk Van de Put said in an interview. Wuhan, China, is the epicentre of the virus, which has killed more than 100 people.
Emerging markets like China - where incomes and demand for e-commerce are rising - have become increasingly important to Mondelez as the consumer goods industry grapples with slowing demand in developed countries.
The Illinois-based company has invested heavily in China and India in recent years, spending more on marketing and creating products. In China, for instance, Mondelez has been working for years with Alibaba’s online marketplace Tmall to expand its reach, creating novelties like wasabi- or hot chicken- flavoured Oreos.
Fourth-quarter sales rose 4.5% in Mondelez’s Asia, Middle East and Africa business.
Mondelez has been pushing hard on investments and can still be in more stores, Van de Put said. He singled out growth in the company’s biscuit businesses in India and China, as well as strong chocolate and gum sales in each country, respectively.
Impact Shorts
More ShortsReported revenue in emerging markets rose 4%. Products specific to local markets - such as biscuit brands Jubilee in Russia, Bissau in Indonesia and Prince Polo chocolate bars in Poland - have been key revenue drivers.
Net earnings attributable to the company fell to $726 million (552 million pounds), or 50 cents per share, in the quarter ended Dec. 31, from $823 million, or 56 cents per share, a year earlier.
Excluding certain items, Mondelez earned 61 cents per share, a cent above analysts’ estimates, according to IBEX data from Refining.
Mondelez said its adjusted operating income margin fell 20 basis points to 16.5% due to higher raw material costs and costs related to the closure of plants in Brazil.
Net revenue rose 2.1% to $6.91 billion, beating analysts’ expectations of $6.84 billion.
(Reporting by Richa Naidu in Chicago and Uday Sampath in Bengaluru; Editing by Shinjini Ganguli and Leslie Adler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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