By Martinne Geller
Feb 13 Mondelez International Inc
reported weaker-than-expected revenue for the second time in its
two quarters as an independent company, and its shares fell 3.7
percent in afterhours trade.
The company, which makes Trident gum, Oreo cookies and
Cadbury chocolate, saw revenue rise 3.7 percent excluding any
impact from acquisitions, divestitures and other things. That is
slightly weaker than its forecast calling for mid-single-digit
growth, which the company said would have been at least 4
Mondelez stood by its forecast for 2013 revenue growth at
the low end of the 5 percent to 7 percent range, but at least
one Wall Street analyst questioned whether Mondelez can achieve
"The organic growth has now fallen short of street
expectations for two consecutive quarters," said JP Morgan
analyst Ken Goldman on a conference call, noting that growth
potential is the main reason for investing in Mondelez stock.
"Right now, there is a little lack of confidence that
(Mondelez) will get to that 5 percent number, right or wrong,"
Goldman told company executives.
Late last year, Kraft Foods Group spun off from its
parent company, taking away brands like Maxwell House, Kraft and
Oscar Mayer from the snacks business, renamed Mondelez. While
the new Kraft is a high-margin, North American business with
mature brands, Mondelez was seen as more of a growth company,
given its large exposure to emerging markets and snacks.
For the fourth quarter, Mondelez cited a sales interruption
in Canada related to the separation of its businesses and
ongoing weakness in the gum segment. In the third quarter, the
company blamed "short-term executional" issues in Brazil and
Russia, that it said have since improved.
The gum business has struggled for some time, due to market
share losses and weakness in the overall category as young
people, key buyers of gum, have been hit hard by unemployment.
"Frankly, I'm disappointed that gum remains a challenge,"
Chief Executive Irene Rosenfeld said on the conference call. "At
only 9 percent of our total revenue, we do not need an immediate
turnaround in gum to achieve our 2013 revenue guidance or our
long-term targets." She said the company is working on improving
its market share. Fixing the category will take more time, she
Aside from those things, Rosenfeld told Reuters she felt
very good about the results, saying that performance in
developing markets had rebounded as predicted.
"Overall, it was a sound quarter," Rosenfeld said, adding
that she remains as convinced of the benefits of splitting up
the company, if not more so, than she was last year.
The company raised its forecast for 2013 operating earnings
to a range of $1.52 to $1.57 per share, due to currency. It
earlier forecast $1.50 to $1.55 per share.
Revenue growth will be more modest in the first half of the
year and accelerate in the back half, the company said.
Net profit for the fourth quarter was $534 million, or 30
cents per share, down from $830 million, or 47 cents per share,
a year earlier.
Excluding items, earnings were 36 cents per share. Analysts
on average were expecting 38 cents per share, according to
Thomson Reuters I/B/E/S.
Revenue fell 1.9 percent to $9.50 billion. Analysts expected
"We had thought Mondelez had the potential to disappoint on
the top line, related to the turnaround efforts in the gum
segment and the fact that tastes in snack preferences vary
around the world," said Morningstar analyst Erin Lash. "We
hadn't been as aggressive as the market."
Lash said she believes the fair value of Mondelez shares is
around $24. The shares closed at $27.75 on Wednesday on the
Nasdaq, up 9 percent this year. They fell to $26.76 in