(Adds executive comment from conference call)
May 1 Kraft Foods Group Inc on Thursday
reported a higher quarterly profit, helped by cost cuts and
gains related to moves to manage the cost of key ingredients in
its products such as Velveeta cheese and Maxwell House coffee.
Kraft has raised or will soon increase prices on about 45
percent of the products in its portfolio, including cheese, cold
cuts and bacon due to significant spikes in commodities such as
dairy and meat, executives said on a conference call with
Chief Executive Tony Vernon said the company could
temporarily lose some market share due to the price hikes, but
that its long-term growth model remains intact.
"We feel good about our ability to manage our costs over
time," Vernon said.
Kraft previously warned that the slowly improving U.S. job
market and the recent reduction in federal food stamp benefits
would soften results at the start of 2014.
The Northfield, Illinois-based company said first-quarter
net earnings were $513 million, or 85 cents per share, up from
$456 million, or 76 cents per share, a year ago.
The earnings-per-share from the latest quarter included a
2-cent gain related to retiree benefits as well as a 5-cent
boost related to Kraft's hedging activities, it said.
Net revenue fell 3.3 percent to $4.4 billion, largely due to
customers working through supplies left over from the soft
holiday season and the shift of the timing of Easter into the
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 $56.69, were unchanged in
(Reporting by Lisa Baertlein in Los Angeles; Editing by James
Dalgleish and Richard Chang)