Mondelez International reported lower first-quarter operating earnings today (27 April) as a drop in net sales offset stronger margins and underlying sales growth.

The Oreo owner said operating income increased 80 basis points in the three months. However, operating income was down 11% to US$722m from $811m in the year-ago period. 

Net revenue fell 16.8% to $6.5bn driven by the divestiture of Mondelez’s coffee business. Currency headwinds weighed 7.2%. On an organic basis, however, revenue grew 2.1%. 

Net earnings were also boosted by gains from the transaction, with diluted EPS rising 84% to $0.35 a share and adjusted EPS increasing 31% to $0.48. 

“We’ve had a good start to the year,” chairman and CEO Irene Rosenfeld said. “We significantly expanded margins by continuing to reduce supply chain and overhead costs.  In addition, we delivered improved volume/mix in developed markets, while effectively managing through the volatile operating environment in emerging markets.  As a result, we’re confident in our ability to deliver our 2016 outlook that we shared in February.”

Mondelez reaffirned its guidance for 2016 of 2% rise in organic net revenue for 2016 and margins of between 15% and 16%.