Mondelez Stock Falls 6% Despite Reporting Q3 Earnings & Sales Beat

Core Insights - Mondelez International, Inc. (MDLZ) reported third-quarter 2025 results with a year-over-year revenue increase, surpassing the Zacks Consensus Estimate, but a decline in adjusted earnings year over year, although still beating consensus expectations [1][12] Financial Performance - Net revenues rose 5.9% year over year to $9,744 million, exceeding the Zacks Consensus Estimate of $9,737 million, driven by organic net revenue growth, positive foreign currency impacts, and additional revenues from the acquisition of Evirth [4] - Adjusted earnings were 73 cents per share, a decrease of 24.2% on a constant-currency basis, but above the Zacks Consensus Estimate of 72 cents, primarily due to operating declines offset by lower taxes and fewer shares outstanding [5][12] - Organic net revenues grew 3.4% year over year, with pricing contributing 8.0 percentage points, while volume/mix had a negative impact of 4.6 percentage points [6] Market Segmentation - Revenues from emerging markets increased 9.9% to $3.88 billion, with organic growth of 7.1%, supported by favorable pricing actions [7] - Revenues from developed markets rose 3.3% to $5.86 billion, with organic growth of 1.2%, driven by strong pricing execution [7] - Regionally, North America saw a revenue decline of 0.4%, while Latin America, Asia, the Middle East and Africa, and Europe experienced growth of 2.8%, 9%, and 10.6% respectively [8] Cost and Margin Analysis - Adjusted gross profit decreased by $796 million at constant currency, with the adjusted gross margin declining by 1,010 basis points to 30.4%, primarily due to higher raw material and transportation costs [9] - Adjusted operating income fell by $582 million at constant currency, with the adjusted operating income margin declining by 690 basis points to 12%, driven by higher input cost inflation [10] Future Outlook - The company updated its 2025 outlook to reflect a more cautious stance, expecting organic net revenue growth of 4% or higher, down from the previous 5% estimate, and a projected 15% decline in adjusted EPS on a constant-currency basis [2][17] - Management anticipates free cash flow of more than $3 billion for 2025, with $2.12 billion in net cash from operating activities reported for the three months ended September 30, 2025 [13][17]