Kraft Foods Inc. Earnings Cheat Sheet: Revenue Strengthens Again by Double-Digits

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

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

Kraft Foods Earnings Cheat Sheet for the Third Quarter

Results: Net income for Kraft Foods Inc. rose to $922 million (52 cents per share) vs. $754 million (43 cents per share) in the same quarter a year earlier. This marks a rise of 22.3% from the year earlier quarter.

Revenue: Rose 11.5% to $13.23 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: KFT fell short of the mean analyst estimate of 56 cents per share. It beat the average revenue estimate of $12.8 billion.

Quoting Management: “Our investments in marketing and new products continue to drive high quality growth and solid market shares. And we’ve accomplished this despite having taken significant price increases to offset record-high input costs,” said Irene Rosenfeld, Chairman and CEO. “Together with substantial savings opportunities, we expect to deliver top-tier results in 2011 and remain on track to launch two industry-leading companies with strong operating momentum in the coming year.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 16.4%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 24.9% from the year earlier quarter.

Gross margin shrank 1.5 percentage points to 34.9%. The contraction appeared to be driven by increased costs, which rose 14.2% from the year earlier quarter while revenue rose 11.5%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 4 cents, and in the first quarter, it was ahead by 5 cents.

While the company has been profitable for the last nine quarters, income has fallen year over year by an average of 12.7% over the past five quarters. The quarter hit the hardest was the first quarter, that saw a 57.6% drop.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 59 cents per share to 58 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $2.27 per share, a rise from $2.23 ninety days ago.

Competitors to Watch: General Mills, Inc. (NYSE:GIS), J&J Snack Foods Corp. (NASDAQ:JJSF), Ralcorp Holdings, Inc. (NYSE:RAH), The Hain Celestial Group, Inc. (NASDAQ:HAIN), Kellogg Company (NYSE:K), ConAgra Foods, Inc. (NYSE:CAG), Inventure Foods, Inc. (NASDAQ:SNAK), TreeHouse Foods Inc. (NYSE:THS), PepsiCo, Inc. (NYSE:PEP), and Golden Enterprises, Inc. (NASDAQ:GLDC).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)

 

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