May 02 Kraft Foods Group Inc posted
quarterly earnings that far exceeded Wall Street estimates on
Thursday, as increased spending on some of its biggest brands
paid off, sending the company's shares higher.
Still, the U.S. maker of Maxwell House coffee, Oscar Mayer
lunch meat and Planters nuts stood by its full-year forecast as
it expects to continue investing.
"I don't want you to think that we're off to the races in
terms of underlying profit and earnings growth," said Chief
Financial Officer Tim McLevish.
Net income was $456 million, or 76 cents per share, in the
first quarter, down from $483 million, or 82 cents per share, a
year earlier, before the company separated from Mondelez
Net revenue rose 2.1 percent to $4.55 billion.
Analysts on average were expecting earnings of 64 cents per
share and revenue of $4.48 billion, according to Thomson Reuters
The company stood by its 2013 outlook for earnings of $2.75
per share on organic revenue growth in line with that of the
North American food and beverage market.
Other food companies also reported quarterly earnings on
Thursday, including Kellogg, Hillshire Brands and
Hain Celestial Group Inc.
With Kraft separated from Mondelez, it no longer has
exposure to high-growth emerging markets. It is instead pouring
more money into its stable of mature North American brands, such
as Velveeta cheese and Jell-O. It described some early
"We're talking about 16 percent growth on Velveeta cheese,"
said Kraft CEO Tony Vernon. "Who would have thunk it, right,
He said the company was "waking up sleeping giants" in areas
like Kraft salad dressing, Oscar Mayer cold cuts and Miracle
Whip to fend off aggressive competitors.
"In select instances, defending our success may also mean
getting sharper on price points, to show that we will not
tolerate incursions into our market share or irrational behavior
that would disrupt the long-term health of our categories,"
Vernon said, meaning that the company would not let lower-priced
competitors steal market share.
He later qualified his stance, saying the focus is on more
efficient spending on promotions, not greater promotions.
Shares of the company rose 1 percent to $51.10 in
after-hours trading. They closed at $50.53 on the New York Stock