May 1, 2018 / 8:20 PM / in 9 months

Rising snack demand in Europe, emerging markets fuels Mondelez beat

(Reuters) - Mondelez International Inc (MDLZ.O) topped Wall Street estimates for first-quarter profit and revenue on Tuesday, helped by strong demand for Oreo cookies and belVita biscuits in European and 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

Sales in Europe, the company’s biggest revenue generator, jumped 14.4 percent, while emerging markets that include Latin America and Asia saw a 7.6 percent rise in sales.

“We continue to see encouraging snacking category growth trends, especially in emerging markets,” said Chief Executive Officer Dirk Van de Put, who took over in November.

Net sales from the company’s power brands, such as Cadbury Dairy Milk, Milka chocolate and Oreo cookies, rose 8.2 percent to $5.14 billion.

The snack maker’s shares, which have fallen over 9 percent this year, rose 1.3 percent to $39.50 in after-market trading.

Mondelez, however, warned of pressures on adjusted operating profit margins in the second quarter due to rising commodity and freight expenses.

U.S. packaged food companies are facing a spike in costs due to a dearth of drivers, new regulations and higher diesel prices.

Rival chocolate maker Hershey Co (HSY.N) last week blamed higher commodity and freight costs for a cut in its full-year sales forecast.

Sales in the Toblerone chocolate maker’s North America again fell, slipping 1.3 percent to $1.63 billion as consumers’ shift to healthier brands that contain no artificial ingredients or transfats.

In a post-earnings analysts call, the CEO said the company expects gradual progress in North America to continue over the next few quarters.

The company’s net revenue rose 5.5 percent to $6.77 billion, beating analysts’ average estimate of $6.65 billion, according to Thomson Reuters I/B/E/S.

Excluding items, Mondelez earned 62 cents a share, topping estimate of 61 cents.

Reporting by Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur and Sriraj Kalluvila

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