UPDATE 2-Kraft profit up on retiree benefit gain, cost savings

Thu Feb 13, 2014 6:46pm EST

Feb 13 (Reuters) - Kraft Foods Group Inc on Thursday reported a higher quarterly profit on lower costs and a large accounting gain related to retiree benefits.

Kraft, whose stable of famous food brands includes Velveeta cheese, Jell-O desserts and Maxwell House coffee, said it expected a slow start to the year in part due to the weak U.S. job market and the recent reduction in federal food stamp benefits.

The Northfield, Illinois-based company said fourth-quarter net earnings rose to $931 million, or $1.54 per share, up from $90 million, or 15 cents per share, a year ago.

Earnings from the latest quarter included a $1.11 per share accounting gain due to higher discount rates and asset returns that benefited its pension and retiree medical plans.

Net revenue grew 2.3 percent to $4.6 billion with the company selling more goods and a greater proportion of higher-priced products. That was slightly offset by lower prices to offset lower costs for ingredients such as raw nuts and coffee beans.

Kraft, whose products also include Oscar Mayer lunch meats, Planters nuts and Capri Sun juices, lost its exposure to high-growth emerging markets after its 2012 split from Mondelez International Inc and has been working to increase sales of its stable of mature brands.

Shares of Kraft, which closed at $53.61, climbed 1.2 percent to $54.24 in after-hours trading.

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