Mondelez (MDLZ) Reliance on International Sales: What Investors Need to Know

Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.

While delving into MDLZ's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

The recent quarter saw the company's total revenue reaching $9.36 billion, marking an improvement of 4.1% from the prior-year quarter. Next, we'll examine the breakdown of MDLZ's revenue from abroad to comprehend the significance of its international presence.

A Dive into MDLZ's International Revenue Trends

During the quarter, AMEA contributed $1.97 billion in revenue, making up 21.1% of the total revenue. When compared to the consensus estimate of $1.91 billion, this meant a surprise of +3.18%. Looking back, AMEA contributed $2.3 billion, or 22.9%, in the previous quarter, and $1.82 billion, or 20.3%, in the same quarter of the previous year.

Europe generated $3.38 billion in revenues for the company in the last quarter, constituting 36.1% of the total. This represented a surprise of -3.59% compared to the $3.5 billion projected by Wall Street analysts. Comparatively, in the previous quarter, Europe accounted for $3.87 billion (38.4%), and in the year-ago quarter, it contributed $3.41 billion (38%) to the total revenue.

Latin America accounted for 14.7% of the company's total revenue during the quarter, translating to $1.37 billion. Revenues from this region represented a surprise of +5.48%, with Wall Street analysts collectively expecting $1.3 billion. When compared to the preceding quarter and the same quarter in the previous year, Latin America contributed $1.35 billion (13.4%) and $1.19 billion (13.3%) to the total revenue, respectively.

Projected Revenues in Foreign Markets

For the current fiscal quarter, it is anticipated by Wall Street analysts that Mondelez will post revenues of $9.95 billion, which reflects an increase of 2.2% the same quarter in the previous year. The revenue contributions are expected to be 21.7% from AMEA ($2.16 billion), 36.6% from Europe ($3.64 billion) and 13.4% from Latin America ($1.34 billion).

For the full year, the company is expected to generate $39.9 billion in total revenue, up 3.5% from the previous year. Revenues from AMEA, Europe and Latin America are expected to constitute 21.6% ($8.63 billion), 38.3% ($15.27 billion) and 13.6% ($5.43 billion) of the total, respectively.

Key Takeaways

Relying on global markets for revenues presents both prospects and challenges for Mondelez. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.

At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

At present, Mondelez holds a Zacks Rank #3 (Hold). This ranking implies that its near-term performance might mirror the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

A Look at Mondelez's Recent Stock Price Performance

Over the past month, the stock has gained 2.3% versus the Zacks S&P 500 composite's 0.2% increase. The Zacks Consumer Staples sector, of which Mondelez is a part, has risen 2.6% over the same period. The company's shares have increased 1.2% over the past three months compared to the S&P 500's 4.2% increase. Over the same period, the sector has risen 4.4%

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This article originally published on Zacks Investment Research (zacks.com).

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