(Corrects 8th paragraph to show Kraft spun off from Mondelez)
Nov 13 Starbucks Corp said it would
restate fourth-quarter results to show an operating loss of
$2.12 billion to reflect damages related to its dispute with
Starbucks shares were down 1.8 percent at $79.15 in trading
before the bell.
An arbitrator ruled on Tuesday that the company must pay
$2.23 billion in damages plus $527 million for interest and
legal fees for ending its packaged coffee supply agreement with
Kraft at least three years early.
Kraft began selling bags of Starbucks coffee in grocery
stores from September 1998, but Starbucks prematurely ended the
contract in March 2011, giving the business to privately held
The initial term of the deal was to end in March 2014, after
which it was to be renewed automatically for successive 10-year
Starbucks said on Wednesday it would show a loss of $1.64
per share for the quarter ended Sept. 29.
The Seattle-based company had earlier reported a 34 percent
rise in quarterly profit to $481.1 million, or 63 cents per
Mondelez International Inc, a snack and beverage
company that spun off its Kraft Foods business in October 2012,
will receive all proceeds resulting from the ruling.
Shares of Mondelez, whose portfolio includes Cadbury
chocolates, Oreo cookies, Trident gum and Tang powdered soft
drinks, were up 1.8 percent at $33.03 in premarket trading.
Based on the rules of binding arbitration, Starbucks cannot
appeal the decision.
(Reporting by Aditi Shrivastava in Bangalore; Editing by Kirti