Kraft Foods 3rd-quarter profit falls 20 percent

Kraft Foods Inc., the nation's biggest food and beverage maker, said Wednesday its third quarter profit fell 20 percent from results that included a one-time gain a year ago.

Investments in new products and high dairy costs also depressed the latest results.

For the quarter ended Sept. 30, net income fell to $596 million, or 38 cents per share, from $748 million, or 45 cents per share in the prior year quarter.

Kraft said the results included asset impairments and charges of 6 cents per share. Excluding the charges, the company earned 44 cents per share.

Analysts polled by Thomson Financial expected earnings per share of 42 cents.

Kraft said a one-time gain of 9 cents per share in the 2006 third quarter contributed to the decline it reported in this year's period.

The company also said investments in new products, product quality and marketing plus higher costs for dairy hurt profit. The company's cost of sales rose 14 percent and marketing and research costs jumped 8 percent.

Revenue rose 10 percent to $9.05 billion from $8.24 billion in the third quarter of 2006. Analysts predicted revenue of $8.68 billion.

Kraft also maintained its outlook for 2007 earnings per share of $1.60 to $1.62, or $1.80 to $1.82 excluding items.