The political turmoil including a backlash against globalization has caused disruption and uncertainty for Mondelez International Inc(NASDAQ: MDLZ) global business. Mondelez International sells snacks in 165 countries and operates factories all over the world. If President Donald Trump does the planned changes to taxes and tariffs, it could affect global trade, Mondelez operations in Mexico and elsewhere could be affected. Moreover, the economic uncertainty in India due to the demonetization policies was implemented there late last year and in the U.K. since the vote to leave the European Union have weighed on MDLZ’ business in those countries. In addition, the North America food and beverage environment have been very sluggish and more is expected in 2017. Mondelez International would invest more this year in e-commerce sales and in renovating the brands, as the company did recently with non-GMO Triscuits.
Mondelez International Inc(NASDAQ: MDLZ) has reported lower than expected quarter sales and profit in the fourth quarter 2016 ended 31st December due to a strong dollar that eroded the value of sales outside the United States. The company had reported the adjusted revenue fall of 8.1 percent to $6.77 billion in the fourth quarter 2016, missing the analysts’ estimates for revenue of $6.89 billion. MDLZ in the Q4 2016 has reported the adjusted earnings per share of 47 cents, missing the analysts’ estimates for the adjusted earnings per share of 48 cents. Mondelez International fourth-quarter sales in Europe, which is its largest market, was down 4.7 percent. However, they were up marginally on a constant currency basis. Mondelez International has last month raised the prices for some of its products as it grapples with higher commodity costs. Overall the net income attributable to MDLZ was $93 million, in the fourth quarter 2016 compared with a loss of $729 million, a year earlier. Mondelez International adjusted operating profit margin grew about 1 percentage point to 14.4% in the fourth quarter and the company expects it to top 16% this year.
Additionally, Mondelez International gets 75 percent of its sales outside the United States, and expects its 2017 revenue growth to fall by 1 percent and adjusted earnings to be down by 3 cents per share due to the strong dollar. The average value of the dollar has increased 2.3 percent against a basket of currencies in the fourth quarter, from a year earlier.
Mondelez International stock has risen 16.53% in the last one year (source: Google Finance) while has an average price target of $50.43, which is a further upside of 14.80%.