Mondelez Int (MDLZ) Tops Q1 EPS by 5c; Announces New Strategic Initiatives

Mondelez Int (NASDAQ: MDLZ) reported Q1 EPS of $0.39, $0.05 better than the analyst estimate of $0.34. Revenue for the quarter came in at $8.64 billion versus the consensus estimate of $8.64 billion.

The company also announced plans to reduce operating costs to best-in-class levels through a restructuring program that is expected to deliver cost savings of at least $1.5 billion by 2018, providing additional opportunity for margin expansion beyond its revised 2016 target of 15 to 16 percent.

To facilitate these efforts, the Board of Directors approved a $3.5 billion restructuring program through 2018 (the "2014-2018 Restructuring Program"), comprised of approximately $2.5 billion in cash costs and $1 billion in non-cash costs. The restructuring program is intended primarily to cover severance as well as asset disposals and other manufacturing-related one-time costs. The company expects to incur the majority of the program's charges in 2015 and 2016. The $2.2 billion of capital expenditures to support the restructuring program are already included within the company's previous guidance of approximately 5 percent of net revenues for the next few years.

The company expects the 2014-2018 Restructuring Program to generate annualized savings of at least $1.5 billion by 2018. Lower overheads and accelerated supply chain cost reductions are each expected to generate roughly half of the total incremental savings. Overhead reductions will be driven by both lower headcount and non-headcount costs.

For earnings history and earnings-related data on Mondelez Int (MDLZ) click here.

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