By Atossa Araxia Abrahamian
Aug 1 Kraft Foods Group Inc on Thursday
reported higher income and raised its earnings outlook for the
year, but missed Wall Street's revenue estimates, citing lower
prices and an unseasonably early Easter holiday.
Kraft CEO Tony Vernon said seasonal headwinds were "no
excuse" for Kraft's 1.1 percent second-quarter decline in
Strong cheese and dairy sales and increased spending on
advertising for products like Jell-O and Planter's Nuts will
help lift sales through the end of the year, Vernon said.
Revenue in 2013 may nonetheless "trail the North American
food and beverage growth", said CFO Tim McLevish.
Kraft's adjusted 2013 outlook expects growth to be in line
with or slightly lower than the growth of the North American
food and beverage market overall.
Earnings per share are now expected to rise to about $3.40
from $2.75 per share for 2013, largely because of lower
anticipated pension costs.
Net income for the U.S. snack and beverage company rose to
$829 million, or $1.38 per share, in the second quarter, up from
$603 million, or $1.02 per share, a year earlier.
Earnings per share for the quarter include 9 cents in
restructuring costs and a 62 cent non-cash benefit that arose
when the company re-evaluated its obligations to two of its
major pension plans and found they were lower than previously
Excluding these items, the company said earnings per share
for the quarter came to 76 cents.
Analysts expected earnings per share of 66 cents, according
to Thomson Reuters I/B/E/S.
Net revenue fell to $4.74 billion from $4.79 billion in the
second quarter of 2012. Analysts expected earnings of $4.81
billion, according to Thomson Reuters I/B/E/S.
The company's cheese business grew 5 percent in the quarter
to $945 million because of strong sales of Velveeta dinners and
natural cheese, while Kraft's beverage revenues fell 3.2 percent
to $753 million, mostly because of lower coffee prices.