NEW YORK (AP) — Oreo cookie maker Mondelez International Inc. reported a better-than-expected profit Wednesday and sharply raised its stock buyback authorization to $6 billion.
The increase in authorized share repurchases from $1.2 billion comes after activist investor Nelson Peltz said he wanted PepsiCo Inc. to shed its soda business and buy Mondelez to form a global snack powerhouse.
Peltz of Trian Fund Management also noted that Mondelez CEO Irene Rosenfeld was "running out of time" with investors, given the company's underwhelming results since its split with Kraft Foods last year.
Stock buybacks benefit shareholders by reducing the number of outstanding shares. That in turn helps boost a company's earnings per share.
As of March 31, Peltz had a $1.23 billion stake in Mondelez.
Mondelez, which makes Cadbury chocolates, Trident gum and Ritz crackers, also said it's increasing its dividend by 8 percent.
Its stock rose 2 percent to $31.99.
For the quarter, the company said it earned $616 million, or 34 cents per share. That compares with $1.03 billion, or 58 cents per share, a year ago, when it was still combined with Kraft Foods Group Inc.
Not including one-time items, it earned 37 cents per share, which was 3 cents more than Wall Street expected.
Revenue edged up to $8.6 billion, shy of the $8.63 billion analysts expected. Performance in emerging markets such as China, India and Brazil offset weaker results in North America and Europe.
Looking ahead, the company said it expects its revenue to grow in the low-end of its forecast of 5 percent to 7 percent for the year.
The Deerfield, Illinois-based company said it still expects a full-year adjusted profit of $1.55 to $1.60 per share.