* Kraft EPS 45c ex items; analyst view 44c
* Kellogg EPS 89c; analyst view 80c
* Kraft backs 2008, 2009 EPS outlooks
* Kellogg says will finish at high end of '08 EPS outlook
* Kraft up nearly 2 pct premarket; Kellogg not active
CHICAGO, Oct 29 Kraft Foods Inc KFT.N and
Kellogg Co (K.N) posted better-than-expected third-quarter
profits on Wednesday as price increases and new products helped
lift sales in a weak economy.
Kraft also stood by its forecasts for 2008 earnings before
one-time items as well as for 2009 net income, while Kellogg
said its profit this year should hit the high end of its
previous targeted range.
Both Kraft, the largest North American food maker, and
Kellogg, the world's largest cereal company, have taken steps
to cut costs and put more money into advertising. Both have
also bolstered new product development to attract consumers
even as rising commodity costs pushed them to raise prices.
Commodities like wheat and energy have become less
expensive in recent months, but food companies may not see a
big benefit until next year, in part because they lock in their
costs months ahead.
Kraft, which makes Oreo cookies, Tang breakfast drink and
Oscar Mayer hot dogs, reported a profit of 45 cents a share
before one-time items, a penny above what analysts polled by
Reuters Estimates had expected.
The company hiked prices on products, leading to a 0.9
percent drop in volume. However, that key result was still
better than the company had expected.
Analysts are watching to see how much consumers cut back on
buying branded products in the face of rising food prices and a
Kraft sales rose 19.4 percent to $10.46 billion. Organic
sales, which exclude the impact of currency, acquisitions and
divestitures, rose 7.1 percent due to higher pricing.
Over the past several years, Kraft has closed factories,
cut jobs and divested brands to focus on areas like cookies and
crackers, pizza and healthier foods.
Shares of Kraft rose 1.8 percent to $29.39 in premarket
trading from Tuesday's closing price of $28.88 on the New York
Stock Exchange, while Kellogg stock was not active.
Kellogg, the maker of Rice Krispies and Eggo waffles, said
net income rose to 89 cents a share from 76 cents a year
earlier. The results were far better than the 80 cents analysts
Sales rose 9 percent to $3.29 billion. Excluding the impact
of currency and acquisitions, the increase was 7 percent.
Kellogg said it expected full-year profit to come in at the
high end of its prior forecast of $2.95 to $3 a share, compared
with analysts' expectations of $3.
For 2009, the company said it was confident earnings per
share would increase at a high single-digit percentage rate,
excluding the impact of currency fluctuations.
(Reporting by Ben Klayman and Brad Dorfman; Editing by Lisa