Kraft Foods Inc. Earnings: Profit Rises for Third Straight Quarter

S&P 500 (NYSE:SPY) component Kraft Foods Inc. (NYSE:KFT) reported its results for the fourth 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 Fourth Quarter

Results: Net income for the food company rose to $830 million (47 cents per share) vs. $540 million (30 cents per share) in the same quarter a year earlier. This marks a rise of 53.7% from the year-earlier quarter.

Revenue: Rose 6.6% to $14.69 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Kraft Foods Inc. reported adjusted net income of 57 cents per share. By that measure, the company fell in line with the mean estimate of 57 cents per share. Analysts were expecting revenue of $14.79 billion.

Quoting Management: “We delivered terrific results in 2011, and our businesses are healthier than ever due to the disciplined execution of our strategy,” said Irene Rosenfeld, Chairman and CEO. “We expect to deliver top-tier growth in 2012, in line with our long-term targets, while we prepare to successfully launch the North American grocery and global snacks companies later this year.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 22.3% and in the second quarter, the figure rose 4.2%.

Gross margin shrank 1.5 percentage points to 33.3%. The contraction appeared to be driven by increased costs, which rose 9.1% from the year earlier quarter while revenue rose 6.6%.

Revenue has risen for the last four quarters. Revenue increased 11.5% to $13.23 billion in the third quarter. The figure rose 13.3% in the second quarter from the year earlier and climbed 11.1% in the first quarter from the year-ago quarter.

The company met estimates last quarter after toppling them in the two previous quarters. In the third quarter, it topped the mark by 2 cents, and in the second quarter, it was ahead by 4 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 57 cents a share to 56 cents over the last ninety days. For the fiscal year, the average estimate has been unchanged at $2.29 a share.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

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