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Oreo maker Mondelez's profit beats on higher demand for key brands
[BENGALURU] Mondelez International, the world's No.2 confectionary company, posted a quarterly profit that beat estimates on Wednesday, benefiting from strong demand for Cadbury Dairy Milk and Oreo cookies in Europe and growth in emerging markets.
Revenue from Europe, its largest market, rose 5 per cent and accounted for nearly 40 per cent of total revenue.
However, revenue from North America fell 0.6 per cent, as its biscuits business was affected by malware-related losses.
The snack giant was hit by a cyber attack last year that hurt shipment volumes, leading to a US$100 million loss in revenue for the full year.
"Since the malware incident last summer, our supply chain execution has been challenged (in North America)," newly-appointed chief executive Dirk Van de Put said on a post-earnings conference call on Wednesday.
"While we are making progress, returning to normal service levels is taking longer than anticipated," he said.
The East Hanover, New Jersey-based company said its net revenue rose to US$6.97 billion, meeting analysts' average estimate of US$6.97 billion.
Net income rose to US$802 million, or 53 US cents per share in the fourth quarter ended Dec. 31, from US$93 million, or 6 US cents per share, a year earlier.
Excluding items, Mondelez earned 57 US cents per share, just brushing past estimates of 56 US cents.
"Moving forward we believe that Mondelez needs to find a more permanent solution to their difficulties in North America," said Anthony Riva, an analyst at GlobalData Retail.
The company said it expects double-digit adjusted earnings per share growth on a constant currency basis for 2018.
Mondelez also expects organic net revenue to increase one per cent to two per cent for 2018 and adjusted operating income margin of about 17 per cent.
Shares of the confectionery, food and beverage company were flat in extended trading on Wednesday.