Mondelez (MDLZ) Missed Q4 Earnings Estimates, Revenue Beat Y/Y

Mondelez International, Inc. MDLZ released Q4 2021 numbers, in which both the top and bottom lines rose year over year and the first topped the Zacks consensus estimate. The company continued to benefit from its strategic efforts, with volume-led revenue improvement, strong earnings, higher brand and capacity investments and strong free cash flow generation.

In 2021, management consolidated its business with cautious buyouts and remains confident that its brands and focus on execution and strategy keep it well positioned to hold growth firm in a volatile near-term environment.

Quarterly performance

Adjusted earnings were 71 cents per share, which increased 9.1% year over year in constant currency or cc. The metric came in a penny lower than Zacks’ consensus estimate. The year-over-year increase was supported by a lower number of shares outstanding, lower income taxes and higher earnings from equity accounted investments.

Mondelez International, Inc. Price, Consensus and EPS Surprise

Mondelez International, Inc. price-consensus-eps-surprise-chart | Quote from Mondelez International, Inc.

Net revenue rose 4.9% to $7,658 million and beat Zacks’ consensus estimate of $7,540 million. The rise was driven by strong organic net revenue of 5.4% as well as increased sales from the buyouts of Hu, Grenade and Gourmet Food, somewhat offset by currency headwinds. Favorable volumes and pricing contributed to organic net revenue.

Emerging Markets revenue increased 8.8% to $2,692 million, while growing 11.1% on an organic basis. Developed markets revenue increased 2.9% to $4,966 million, while growing 2.5% on an organic basis.

Regionally, revenues in Latin America, Asia, the Middle East and Africa, Europe and North America increased by 12.4%, 7.1%, 5.5% and 0.6% respectively. % year over year. On an organic basis, revenues increased by 19.7%, 5.8% and 6.5% in Latin America, Asia, Middle East & Africa and Europe respectively, and decreased by 0.3% in South America. North.

Adjusted gross profit increased $21 million at cc. Adjusted gross profit margin contracted by 200 basis points (bps) to 37.2% due to higher raw material and transportation costs as well as an unfavorable mix. These were somewhat offset by favorable pricing, volume leverage and manufacturing productivity.

The company’s adjusted operating profit fell $52 million to cc. Adjusted operating margin contracted by 90 basis points to 15.4% due to higher raw material and transportation costs as well as an unfavorable mix. These were somewhat offset by actions on pricing, manufacturing productivity and reduced SG&A spending.

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Other finance

Mondelez ended the quarter with cash and cash equivalents of $3,546 million, long-term debt of $17,550 million and total equity of $28,323 million. MDLZ generated net cash from operating activities of $4,141 million during the 12 months ended December 31, 2021. Free cash flow was $3.2 billion during the same period.

Management expects free cash flow of over $3 billion in 2022.

During the fourth quarter, the company distributed $0.8 billion to shareholders in the form of cash dividends and share buybacks. During 2021, the company committed $3.9 billion to dividends and buybacks.

Advice

For 2022, management expects organic net revenue of more than 3% and a high single digit increase in adjusted earnings per share or EPS at cc. These projections go hand in hand with the company’s long-term algorithms. Currency movements are expected to negatively impact net revenue by nearly 2.5% and Adjusted EPS by 8 cents. Management said the guidance is based on above-normal volatility due to the pandemic.

Shares of this company Zacks Rank #3 (Hold) have risen 11.1% over the past three months compared to the sector’s growth of 2.4%.

Other Consumer Commodity Bets

Some top-ranked stocks are Helen of Troy HELLO, United Natural Foods UNFI and Medifast, Inc. MEDIUM

Helen of Troy, designer, developer, marketer, importer and distributor, currently carries a Zacks Rank #1 (Strong Buy). Shares of Helen of Troy have fallen 7.6% over the past three months. You can see the full list of today’s Zacks #1 Rank stocks here.

Zacks consensus estimate for Helen of Troy’s current-year sales and EPS suggests growth of 0.8% and 0.6%, respectively, from the number reported a year ago . HELE has a surprise on earnings for the last four quarters of 19.1% on average.

United Natural Foods, a distributor of natural, organic, specialty, produce, and conventional grocery and nonfood products, carries a No. 1 Zacks rank. Shares of United Natural Foods fell 15.4% in course of the last three months.

Zacks’ consensus estimate for United Natural Foods’ current-year sales and EPS suggests growth of 5.1% and 8.8%, respectively, from the figure reported a year ago. UNFI has a surprise on earnings for the last four quarters of 35.4% on average.

Medifast, the manufacturer and marketer of weight loss, weight management, healthy living products and other consumable health and nutritional products, currently carries a Zacks Rank #2 (Buy). Medifast shares have fallen 4.1% over the past three months.

Zacks’ consensus estimate for Medifast’s current-year sales and EPS suggests growth of about 63% and 49.3%, respectively, from the figure reported a year ago. MED has a surprise on earnings for the last four quarters of 17.3% on average.

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