Kraft profit beats by a penny
(Reuters) - Kraft Foods Inc's KFT.N profit slightly exceeded Wall Street estimates, after the company raised prices and shipped more Easter chocolates in the first quarter.
North America's largest packaged food maker also reaffirmed its full-year growth targets on Thursday and said it was on track with plans to split into two companies later this year.
Kraft posted net earnings of $813 million, or 46 cents per share, in the first quarter, up from $799 million, or 45 cents per share, a year earlier.
Excluding items, earnings were 57 cents per share. On that basis, analysts on average were expecting 56 cents per share, according to Thomson Reuters I/B/E/S.
Net revenue rose 4 percent to $13.09 billion, topping analysts' estimate of $13.05 billion.
Organic net revenue, which strips out the impact of divestitures and foreign exchange, rose 6.5 percent. Price increases contributed 5.5 percentage points of the growth, while volume and mix of products contributed the rest.
With Easter falling on April 8 this year - instead of April 24 in 2011, Kraft shipped more candy, such as Cadbury Creme Eggs, to retailers in the first quarter.
That boost helped offset slow gum sales that were exacerbated by the weak economies in Southern Europe. Chief Executive Irene Rosenfeld said the company will soon launch a new type of gum in the United States that it expects to reignite sales.
After Kraft splits, one company, to be called Mondelez International, will have a large presence in developing markets selling snacks like Cadbury chocolate, Trident gum and Oreo cookies. The other, which will keep the Kraft name, will be concentrated in North America with grocery brands including Maxwell House coffee, Oscar Mayer lunch meat and Velveeta cheese.
The company also said it is claiming damages of up to $2.9 billion plus attorney fees from its dispute with Starbucks Corp (SBUX.O) over the termination of a relationship the companies had regarding bagged Starbucks coffee.
Rosenfeld commented on the arbitration process between the two companies after Starbucks revealed the companies' claims earlier this week in a securities filing.
Starbucks is claiming damages of up to $62.9 million plus attorney fees.
The company said it still expects 2012 growth of about 5 percent for revenue and at least 9 percent for operating earnings.
Kraft shares slipped 0.5 percent to $39.39 in extended trade after closing at $39.59 on the New York Stock Exchange.
(Reporting by Martinne Geller in New York; Editing by Richard Chang)
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