Kraft profit climbs 13 percent on overseas sales
Kraft Foods Inc., the world's second-largest food company, said second-quarter profit increased as improved performance in Europe and emerging markets offset weaker-than-expected sales in North America.
Net income at the maker of Oreos and Cadbury chocolate rose 13 percent to $937 million, or 60 cents a share, from $827 million, or 56 cents, a year earlier, the Northfield, Illinois- based company said today in a statement. Analysts anticipated 52 cents, the average of projections compiled by Bloomberg.
Sales for Kraft Foods North America climbed 6.3 percent, fueled by new gums from Trident and Dentyne, and grew 73 percent in developing markets, led by Oreo cookies in China and gum across Latin America. Organic revenue, which excludes acquisitions, divestitures and foreign currency fluctuations, increased 2.2 percent.
Kraft rose as much as 5.2 percent to $31.20 in late trading after closing at $29.66 on the New York Stock Exchange. The shares have risen 9.1 percent so far this year.
The company lowered its organic net revenue growth forecast to 3 percent to 4 percent, down from at least 4 percent previously, as it had to match rivals' price cuts. Kraft also reaffirmed its 2010 forecast of operating earnings per share of at least $2.
Total revenue rose 25 percent to $12.25 billion, in line with the $12.29 billion average of estimates compiled by Bloomberg.
In February Chief Executive Irene Rosenfeld acquired Uxbridge, England-based Cadbury for about 13.6 billion pounds ($20.8 billion) in cash and stock after a five-month standoff. The deal transformed the maker of Velveeta cheese into the world's biggest confectionary company, and Kraft said the acquisition would give it leading positions in emerging markets like India.
"We're making excellent progress on the Cadbury integration and expect to realize even greater synergies," Rosenfeld said in the statement.
Kraft increased its estimate for cost savings from the Cadbury integration to at least $750 million from $675 million, and raised the anticipated cost of merging the two companies together to approximately $1.5 billion from $1.3 billion.
(Kraft will hold a conference call at 5 p.m. New York time. To listen, visit {KFT US EVT }.)