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4-Traders Homepage  >  Equities  >  Nyse  >  Kraft Foods Inc    KFT

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Kraft profit beats by a penny

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05/04/2012 | 01:47am CEST
Kraft food products are displayed in a market in San Francisco, California

Kraft Foods Inc's (>> Kraft Foods Inc) profit slightly exceeded Wall Street estimates, after the company raised prices and shipped more Easter chocolates in the first quarter.

Kraft Foods Inc's (>> Kraft Foods Inc) profit slightly exceeded Wall Street estimates, after the company raised prices and shipped more Easter chocolates in the first quarter.

North America's largest packaged food maker also reaffirmed its full-year growth targets on Thursday and said it was on track with plans to split into two companies later this year.

Kraft posted net earnings of $813 million, or 46 cents per share, in the first quarter, up from $799 million, or 45 cents per share, a year earlier.

Excluding items, earnings were 57 cents per share. On that basis, analysts on average were expecting 56 cents per share, according to Thomson Reuters I/B/E/S.

Net revenue rose 4 percent to $13.09 billion, topping analysts' estimate of $13.05 billion.

Organic net revenue, which strips out the impact of divestitures and foreign exchange, rose 6.5 percent. Price increases contributed 5.5 percentage points of the growth, while volume and mix of products contributed the rest.

With Easter falling on April 8 this year - instead of April 24 in 2011, Kraft shipped more candy, such as Cadbury Creme Eggs, to retailers in the first quarter.

That boost helped offset slow gum sales that were exacerbated by the weak economies in Southern Europe. Chief Executive Irene Rosenfeld said the company will soon launch a new type of gum in the United States that it expects to reignite sales.

After Kraft splits, one company, to be called Mondelez International, will have a large presence in developing markets selling snacks like Cadbury chocolate, Trident gum and Oreo cookies. The other, which will keep the Kraft name, will be concentrated in North America with grocery brands including Maxwell House coffee, Oscar Mayer lunch meat and Velveeta cheese.

The company also said it is claiming damages of up to $2.9 billion plus attorney fees from its dispute with Starbucks Corp (>> Starbucks Corporation) over the termination of a relationship the companies had regarding bagged Starbucks coffee.

Rosenfeld commented on the arbitration process between the two companies after Starbucks revealed the companies' claims earlier this week in a securities filing.

Starbucks is claiming damages of up to $62.9 million plus attorney fees.

The company said it still expects 2012 growth of about 5 percent for revenue and at least 9 percent for operating earnings.

Kraft shares slipped 0.5 percent to $39.39 in extended trade after closing at $39.59 on the New York Stock Exchange.

(Reporting by Martinne Geller in New York; Editing by Richard Chang)

By Martinne Geller

Stocks treated in this article : Kraft Foods Inc, Starbucks Corporation
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Financials ($)
Sales 2017 25 608 M
EBIT 2017 4 222 M
Net income 2017 2 947 M
Debt 2017 15 968 M
Yield 2017 2,00%
P/E ratio 2017 21,17
P/E ratio 2018 17,85
EV / Sales 2017 2,98x
EV / Sales 2018 2,91x
Capitalization 60 381 M
Income Statement Evolution
Consensus
 
Mean consensus OUTPERFORM
Number of Analysts 19
Average target price 49,7 $
Spread / Average Target 24%
EPS Revisions
Managers
NameTitle
Irene B. Rosenfeld Chairman & Chief Executive Officer
Brian T. Gladden Chief Financial Officer & Executive Vice President
Robin S. Hargrove Executive VP-Research, Development & Quality
Mark D. Ketchum Lead Independent Director
Lois D. Juliber Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
KRAFT FOODS INC60 381
NESTLÉ10.75%258 581
THE KRAFT HEINZ COMPANY-8.53%94 439
MONDELEZ INTERNATIONAL-9.34%60 381
DANONE10.33%53 464
ASSOCIATED BRITISH FOODS17.01%34 431