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It has been about a month since the last earnings report for Mondelez (MDLZ). Shares have added about 15.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Mondelez due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Mondelez Q4 Earnings Miss Estimates Amid Escalated Cocoa Inflation
Mondelez International reported fourth-quarter 2024 results, wherein adjusted earnings were 65 cents per share, which decreased 15.9% on a constant-currency (cc) basis. The metric missed the Zacks Consensus Estimate of earnings of 66 cents per share. This decline was mainly caused by decreased operating results and lower equity method investment earnings, somewhat offset by reduced taxes and shares outstanding.
Net revenues increased 3.1% year over year to $9,604 million, driven by effective pricing strategies and positive volume/mix growth. However, the metric came below the Zacks Consensus Estimate of $9,691.7 million. Organic net revenues grew 5.2% year over year in the fourth quarter. The upside was primarily fueled by a 5.1 percentage point (pp) increase in net pricing, alongside a favorable volume/mix impact of 0.1 pp. Our model estimated organic net revenue growth of 5.6%.
Revenues from emerging markets increased 1.7% to $3,640 million and rose 6.7% on an organic basis. The growth was backed by favorable pricing actions (up 6.5 pp) and volume/mix (up 0.2 pp). The company saw growth trends across countries like South Africa, China and Brazil among others. Revenues from developed markets increased 4% to $5,964 million while increasing 4.3% on an organic basis, reflecting solid growth from Europe and the U.S. Developed markets saw a volume/mix increase of 0.1 pp while pricing was favorable by 4.2 pp.
Region-wise, revenues in Latin America dropped 7.2%, while the metric in Asia, the Middle East & Africa and Europe grew 9.9% and 5.8%, respectively. In the North American regions, revenues inched up 0.1%. On an organic basis, revenues rose 4.9%, 8.6%, 7.4% and 0.4% in Latin America, Asia, the Middle East & Africa, Europe and North America, respectively.
The adjusted gross profit fell by $440 million at cc, and the adjusted gross profit margin contracted by 650 basis points (bps), reaching 31.5%. This decline was mainly due to increased raw material and transportation costs, somewhat offset by favorable pricing and reduced manufacturing costs stemming from improved productivity.
Mondelez’s adjusted operating income declined by $396 million at cc, while the adjusted operating income margin contracted 510 bps to 10%. This decrease was mainly caused by escalated input cost inflation, partially mitigated by favorable net pricing, overhead leverage and lower manufacturing costs resulting from productivity improvements.