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Rising snack demand in Europe, emerging markets fuels Mondelez beat
[BENGALURU] Mondelez International Inc topped Wall Street estimates for first-quarter profit and revenue on Tuesday, helped by strong demand for Oreo cookies and belVita biscuits in European and emerging markets.
Sales in Europe, the company's biggest revenue generator, jumped 14.4 per cent, while emerging markets that include Latin America and Asia saw a 7.6 percent rise in sales.
"We continue to see encouraging snacking category growth trends, especially in emerging markets," said Chief Executive Officer Dirk Van de Put, who took over in November.
Net sales from the company's power brands, such as Cadbury Dairy Milk, Milka chocolate and Oreo cookies, rose 8.2 per cent to US$5.14 billion.
The snack maker's shares, which have fallen over 9 per cent this year, rose 1.3 per cent to US$39.50 in after-market trading.
Mondelez, however, warned of pressures on adjusted operating profit margins in the second quarter due to rising commodity and freight expenses.
U.S. packaged food companies are facing a spike in costs due to a dearth of drivers, new regulations and higher diesel prices.
Rival chocolate maker Hershey Co last week blamed higher commodity and freight costs for a cut in its full-year sales forecast.
Sales in the Toblerone chocolate maker's North America again fell, slipping 1.3 per cent to US$1.63 billion as consumers' shift to healthier brands that contain no artificial ingredients or transfats.
In a post-earnings analysts call, the CEO said the company expects gradual progress in North America to continue over the next few quarters.
The company's net revenue rose 5.5 per cent to US$6.77 billion, beating analysts' average estimate of US$6.65 billion, according to Thomson Reuters I/B/E/S.
Excluding items, Mondelez earned 62 cents a share, topping estimate of US61 cents.