January 31, 2018 / 9:19 PM / 10 months ago

Oreo maker Mondelez's profit beats on higher demand for key brands

(Reuters) - Mondelez International Inc (MDLZ.O), the world’s No. 2 confectionary company, posted a quarterly profit that beat estimates on Wednesday, benefiting from strong demand for Cadbury Dairy Milk and Oreo cookies in Europe and growth in emerging markets.

FILE PHOTO: The logo of Mondelez International is pictured at the company's building in Zurich November 14, 2012. REUTERS/Michael Buholzer/File Photo

Revenue from Europe, its largest market, rose 5 percent and accounted for nearly 40 percent of total revenue.

However, revenue from North America fell 0.6 percent, as its biscuits business was affected by malware-related losses.

The snack giant was hit by a cyber attack last year that hurt shipment volumes, leading to a $100 million loss in revenue for the full year.

“Since the malware incident last summer, our supply chain execution has been challenged (in North America),” newly-appointed Chief Executive Dirk Van de Put said on a post-earnings conference call on Wednesday.

“While we are making progress, returning to normal service levels is taking longer than anticipated,” he said.

The East Hanover, New Jersey-based company said its net revenue rose to $6.97 billion, meeting analysts’ average estimate of $6.97 billion.

Net income rose to $802 million, or 53 cents per share in the fourth quarter ended Dec. 31, from $93 million, or 6 cents per share, a year earlier.

Excluding items, Mondelez earned 57 cents per share, just brushing past estimates of 56 cents.

“Moving forward we believe that Mondelez needs to find a more permanent solution to their difficulties in North America,” said Anthony Riva, an analyst at GlobalData Retail.

The company said it expects double-digit adjusted earnings per share growth on a constant currency basis for 2018.

Mondelez also expects organic net revenue to increase 1 percent to 2 percent for 2018 and adjusted operating income margin of about 17 percent.

Shares of the confectionery, food and beverage company were flat in extended trading on Wednesday.

Reporting by Vibhuti Sharma in Bengaluru; Editing by Bernard Orr

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