Updated version 2 – With easing cost pressures, Mondelēz International's third-quarter profit exceeds expectations

The full article has been supplemented with details, updated share price data, and added analyst commentary and charts.

Reuters, October 29 - On Thursday, Mondelez International (MDLZ.O), the parent company of Cadbury, reported third-quarter profits that exceeded Wall Street expectations, thanks to declining raw material costs, even though consumer confidence in North America remains weak.

Shares of the Oreo maker rose 3% in after-hours trading.

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A global cocoa supply surplus lowered costs for the chocolate manufacturer, eased margin pressures, and gave it more flexibility to attract consumers through promotions and value packs.

“We have seen that where we are able to reinvest in high value-for-money products, consumers are responding positively,” said CEO Dirk Van de Put, adding that the company is seeing improving trends in several chocolate markets.

However, Van de Put stated that consumer confidence in North America remains weak and is under pressure from rising energy prices.

The company also announced it will acquire Undercover Snacks, which produces chocolate-coated quinoa crisps, aiming to expand in the rapidly growing “healthy indulgence” snack category.

“Mondelez’s acquisition of Undercover Snacks is expected to enhance its position in the ‘better-for-you’ segment and attract consumers who are willing to pay a premium for products with health benefits,” said eMarketer analyst Rachel Wolff.

The Toblerone maker reported this quarter’s prices rose 0.3 percentage points, while sales volume increased by 1.8 percentage points.

In previous years, Mondelez had raised prices in response to cocoa price increases, but has since reduced prices for some chocolate products in Europe. As consumers return to the category, sales are beginning to recover.

The company’s adjusted earnings per share for the quarter ended September 30 were 78 cents, exceeding analysts’ average estimate of 71 cents per share.

According to data compiled by London Stock Exchange Group (LSEG), its quarterly net revenue was $9.97 billion, slightly below analysts’ average expectation of $9.98 billion.

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