At a time when most food companies are seeing sluggish sales in Europe due to the difficult macroeconomic environment, Mondelez International, Inc. (MDLZ) saw improved revenues in the country in the third quarter. Organically, European revenues increased 1.9% as volume/mix gains mainly in chocolates, coffee and biscuits were offset by lower coffee pricing and weakness in gum.
In order to further strengthen its presence in the country, Mondelez announced an investment plan in Europe earlier this week. In keeping with its commitment to invest $240 million in European biscuit manufacturing since 2011, the food company plans to build a $100 million biscuit factory at the Opava site in Czech Republic.
The new plant, expected to create 200 jobs, will make Oreo cookies and belVita breakfast biscuits to keep up with the expected increase in demand.
Other Stocks to Consider
The Zacks Rank #3 (Hold) company, previously known as Kraft Foods, Inc., spun off its North American grocery business into a separate independent company, Kraft Foods Group (KRFT), in October last year. Ever since, Mondelez has been under pressure and has posted disappointing results.
Earlier this month, Mondelez reported dismal third-quarter 2013 results, managing to meet the Zacks Consensus Estimate for earnings but missing the same for revenues due to weak performance in China. The company also lowered its organic revenue guidance for 2013 as the present headwinds are expected to continue.
Other better-placed stocks in the same industry include Omega Protein Corp (OME) and Pinnacle Foods Inc. (PF). While Omega Protein carries a Zacks Rank #1 (Strong Buy), Pinnacle holds a Zacks Rank #2 (Buy).
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