NEW YORK Kraft Foods Inc KFT.N reported better-than-expected quarterly profit on Thursday and affirmed its outlook for this year and next, with growth fueled by its acquisition of Britain's Cadbury.
Kraft, North America's largest packaged food company, said it still expects 2010 combined organic net revenue growth of 3 percent to 4 percent and operating earnings of at least $2 per share. For 2011, it expects net revenue growth of at least 5 percent and earnings growth in the mid-teen percent range.
"I remain confident that we will achieve our goals for 2010 and accelerate our growth in 2011," said Chief Executive Officer Irene Rosenfeld in a statement.
Kraft's net income was $754 million, or 43 cents per share, in the third quarter, down from $824 million, or 55 cents per share, a year earlier.
Excluding one-time costs, earnings were 47 cents per share. On that basis, analysts on average were expecting 46 cents per share, according to Thomson Reuters I/B/E/S.
Net revenue rose 26 percent to $11.86 billion, helped by the $18.4 billion purchase of Britain's Cadbury, which added Cadbury chocolate, Trident gum and Halls lozenges to a portfolio that includes dozens of brands such as Oreo cookies, Philadelphia cream cheese and Maxwell House coffee.
Excluding the acquired brands, revenue in Kraft's base business rose 2.5 percent, with higher prices accounting for the lion's share of the increase. Improvements in sales volume and mix of products sold contributed only 0.2 percent growth to sales.
Kraft shares rose 5 cents, or 0.1 percent, to $31.84 following the earnings report, after closing at $31.79 on the New York Stock Exchange, up 0.7 percent during the regular session. They have gained 17 percent this year.
(Reporting by Martinne Geller. Editing by Robert MacMillan, Gary Hill)