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Oreo maker Mondelez's revenue drops on Venezuela deconsolidation

An employee monitors foil-wrapped Cadbury Creme Eggs as they move along the production line at the Bournville Cadbury factory, operated by Mondelez International Inc., in Birmingham, U.K.
Simon Dawson | Bloomberg | Getty Images
An employee monitors foil-wrapped Cadbury Creme Eggs as they move along the production line at the Bournville Cadbury factory, operated by Mondelez International Inc., in Birmingham, U.K.

Mondelez International's quarterly profit handily beat analysts' average estimates, helped by cost cuts, and the Cadbury chocolates maker raised its profit forecast for the year.

The company's shares were up 2.3 percent at $43.75 in premarket trading on Wednesday.

Since separating from Kraft in 2012, Mondelez has concentrated on widening its profit margins by reducing costs through divestitures and asset sales.

The company is in the midst of a $3 billion cost saving program, which runs till the end of 2018, opening more efficient manufacturing plants and using zero-based budgeting (ZBB), which requires expenses to be justified for each new period.

Mondelez's selling, general and administrative expenses fell 13.3 percent to $1.6 billion in the third quarter ended September 30.

Adjusted operating income margin rose 220 basis points due to reduced overhead costs from ZBB and sharing services between its businesses.

Excluding items, the company earned 52 cents per share in the third quarter, beating analysts' average estimate of 43 cents per share, according to Thomson Reuters I/B/E/S.

Net revenue fell 6.6 percent to $6.40 billion, but organic revenue rose 1.1 percent, helped by 'power brands' such as Oreo, Chips Ahoy!, Cadbury Dairy Milk chocolates and Trident gum.

Analysts on average had expected net revenue of $6.45 billion.

Net income attributable to Mondelez fell to $548 million, or 35 cents per share, in the quarter, from $7.27 billion, or $4.46 per share, a year earlier.

The year-ago quarter had included a $6.8 billion pretax gain from the spinoff of the company's coffee operations into a joint venture with Dutch group D.E. Master Blenders.