INSTANT VIEW: Kraft profit beats, cites Cadbury deal criteria

NEW YORK (Reuters) - Kraft Foods Inc posted a better-than-expected quarterly profit on Tuesday, but saw revenue fall short of Wall Street forecasts, just days before it is due to put down a formal bid for British chocolatier Cadbury Plc.

Kraft outlined its criteria for formalizing a $16.5 billion approach to Cadbury, saying a deal should add to earnings per share by the second year. Investors in both companies were looking for the maker of Velveeta cheese and Oreo cookies to show progress in cutting costs and raising organic revenue as a way of justifying the takeover.

ERIN SWANSON, ANALYST, MORNINGSTAR

"They did show margin improvement. Sales were a little bit sluggish but did realize a slight increase in the underlying sales and they raised their guidance for the year. So I don't think that this really impacts the bid in any way, however it plays out."

(Reporting by Jessica Wohl; Compiled by Michele Gershberg)