Kraft Foods Earnings: Profit Rises, Misses Estimates

S&P 500 (NYSE:SPY) component Kraft Foods Inc. (NYSE:KFT) reported its results for the first quarter. Kraft Foods manufactures and markets packaged food products, including snacks, beverages, cheese, and convenient meals.

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Kraft Foods Earnings Cheat Sheet for the First Quarter

Results: Net income for Kraft Foods Inc. rose to $813 million (46 cents per share) vs. $799 million (45 cents per share) in the same quarter a year earlier. This marks a rise of 1.8% from the year-earlier quarter.

Revenue: Rose 4.1% to $13.09 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Kraft Foods Inc. fell short of the mean analyst estimate of 56 cents per share. Analysts were expecting revenue of $13.04 billion.

Quoting Management: “Our brand-building investments continue to win over consumers around the world in these tough economic times, and that’s fueling our strong business momentum,” said Irene Rosenfeld, Chairman and CEO. “We remain on track to create two industry-leading companies by the end of this year. As we execute this plan, I’m confident that we will again deliver top-tier results for our shareholders in 2012.” Net revenues were $13.1 billion, up 4.1 percent. Organic Net Revenues increased 6.5 percent, driven by 11 percent growth from Power Brands. Pricing contributed 5.5 percentage points of growth, while volume/mix contributed 1.0 percentage point. The shift of Easter-related shipments into the first quarter benefited volume/mix by approximately 1.3 percentage points, while product pruning in North America had a negative impact of approximately 0.5 percentage points.

Key Stats:

The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 53.7% and in the third quarter of the last fiscal year, the figure rose 22.3%.

Gross margin shrank 1.2 percentage points to 35.6%. The contraction appeared to be driven by increased costs, which rose 6.2% from the year earlier quarter while revenue rose 4.1%.

Revenue has increased for four quarters in a row. Revenue increased 6.6% to $14.69 billion in the fourth quarter of the last fiscal year. The figure rose 11.5% in the third quarter of the last fiscal year from the year earlier and climbed 13.3% in the second quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 57 cents.

Looking Forward: The average estimate for the second quarter remains unchanged at 69 cents a share. For the fiscal year, the average estimate has been unchanged at $2.52 a share.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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