Snack-maker Mondelez International said Wednesday that its third-quarter profit surged on a big coffee venture that offset lower revenue across its business.
By the numbers: The Chicago-area company said it earned $7.27 billion, or $4.46 per share, compared with $899 million, or 53 cents per share, in the same quarter a year ago. Adjusted to exclude one-time items, the company earned 42 cents per share in the quarter that ended Sept. 15. Revenue fell 17.8 percent to $6.8 billion.
Wall Street had, on average, predicted the food giant would earn about 41 cents per share.
— Coffee talk: Mondelez said its profit was driven by a gain from the forming of a joint venture with D.E. Master Blenders 1753 it announced in July. Cash from the joint venture, combined with another business sale, accounted for $7.1 billion in third-quarter gains. Cost-cutting, including job cuts in Chicago as the company moves Oreo production from that plant to Mexico, also helped results. Mondelez also raised prices, most notably in emerging markets.
—New execs: The company said it named Mark Clouse to the newly created position of chief commercial officer and Tim Cofer as chief growth officer as it continues to focus on “cost savings growth and commercial execution.” The two will step into their new roles in January. With the changes, Mondelez says it will be able to focus more precisely on its three main goals going forward — cost savings, growth and commercial execution.
— Looking ahead: Mondelez stuck to its full-year growth expectations, saying continued cost cuts are making up for weak sales in some categories, like gum.
— Just the facts: In an interview with CNBC after the results were released, CEO Irene Rosenfeld said Donald Trump should “get his facts straight” about Oreo production moving to Mexico. Trump said in August that he was boycotting Oreos because Mondelez was moving Oreo production from Chicago to Mexico. The company said in July that it will lay off half of the 1,200 employees at a Chicago plant after declining to make a big investment in the facility, and instead put the money toward an expansion in Mexico.
Rosenfeld said that while the company is cutting production lines in Chicago, it’s making investments in U.S. production in places including New Jersey and suburban Chicago. Rosenfeld also defended the move of some U.S. production to Mexico saying Oreo is a “global brand.”