Mondelez International Inc. (MDLZ) shares plunged around 5% in pre-market trading on Wednesday, following the company's Q4 2024 earnings report and disappointing 2025 profit outlook due to soaring cocoa costs.

For Q4 2024, Mondelez reported revenue of $9.6 billion, slightly missing estimates, and adjusted EPS of $0.65, also missing expectations by a penny. While revenue beat estimates, the company's profitability was severely impacted by higher cocoa costs, leading to a decline in gross profit margins.

The more concerning factor for investors was Mondelez's guidance for the full year 2025. Despite projecting organic net revenue growth of around 5%, exceeding estimates, the company expects adjusted EPS to decline by approximately 10% due to "unprecedented cocoa cost inflation." This earnings forecast missed analysts' expectations of a 6.7% drop.

The company highlighted that soaring cocoa prices have caught up with Mondelez, and the magnitude of unhedged cocoa accounted for in the 2025 EPS was more pronounced than expected. Analysts noted that while cocoa costs are unlikely to rise further, they are expected to remain elevated, impacting 2025 profitability.