Kraft Foods second quarter profit up 11 percent
MILWAUKEE -- Kraft Foods Inc. said Tuesday its second-quarter profit rose 11 percent even though its revenue slipped as the dollar's strength weighed down international sales.
The earnings beat analyst expectations, and the company boosted its profit guidance for fiscal 2009.
The maker of Velveeta, Oreo cookies, Maxwell House coffee and other brands said after the market closed that it earned $827 million, or 56 cents per share, in the three-month period that ended in June. That compares with earnings of $745 million, or 49 cents per share, a year earlier.
The Northfield-based company said its revenue fell 5.9 percent to $10.16 billion, below analysts' predictions of $10.37 billion. The drag of foreign currency exchanges hurt results by 8.1 percentage points, the company said. As the U.S. dollar gains strength, that weighs on international sales once they are converted back to U.S. dollars.
Kraft said consumers continued to support its top brands, with DiGiorno pizza and Oscar Mayer Deli Fresh meats each growing 20 percent or more in the quarter. The company's namesake macaroni and cheese dinners also saw double-digit volume growth, and sales of cookies and crackers like Oreo and Triscuit also saw strong growth.
The company's food service business, which serves retail establishments like restaurants, continued to hurt as consumers cut back on eating out.
CEO Irene Rosenfeld said the company's restructuring program is yielding savings, lowering manufacturing costs and improving its product mix.
"The investments we've made over the past three years are driving solid business momentum in a challenging economic environment," she said in a news release.
The company expects to earn at least $1.93 per share in 2009, up from previous guidance of $1.88. Analysts on average predict earnings per share of $1.93 in 2009, according to Thomson Reuters.
Shares of Kraft rose 14 cents to close at $28.34 on Tuesday before the results were released but slipped 59 cents, or 2 percent, to $27.75 after hours.