November 5, 2010 / 3:02 PM / 9 years ago

Kraft shares fall 2.4 pct on outlook, Starbucks spat

* Kraft kept 2011 forecast, but said it includes 53rd wk

* Sales growth likely to be 3.5 pct-4 pct, not 5 pct-analyst

* Starbucks loss could shave $0.02-$0.04 from EPS-analyst

* Shares down 2.4 percent in morning trade

NEW YORK, Nov 5 (Reuters) - Kraft Foods Inc KFT.N shares fell 2.4 percent on Friday, a day after the packaged foods company said its 2011 forecast included an extra week.

The maker of Maxwell House coffee, Cadbury chocolate and Velveeta cheese also said that Starbucks (SBUX.O) wants to end the companies’ 12-year-old deal whereby Kraft sells packaged Starbucks coffee. [ID:nSGE6A30OF]

RBC Capital Markets analyst Edward Aaron said losing this $500 million business could shave off 1 percent from Kraft’s revenue and 2 cents to 4 cents per share in earnings. He also said the loss could influence Kraft’s strategy moving forward.

“We can’t help but wonder whether this change could motivate Kraft to eventually divest Maxwell House,” Aaron said in a research note.

Kraft affirmed its 2011 targets for net revenue growth of at least 5 percent and earnings growth in the mid-teen percent range. [ID:nN04194868]

Yet on a conference call with analysts late on Thursday, the company said the 2011 period will include a 53rd week, which analysts said makes growth for the comparable period lower.

Credit Suisse analyst Robert Moskow said 2011 core revenue growth is likely to come in closer to 3.5 percent to 4 percent, instead of 5 percent.

“We think the stock will tread water for the next few months as the market digests the news,” Moskow said in a research note.

Kraft shares fell 77 cents, or 2.4 percent, to $31.02 in morning trading on the New York Stock Exchange. (Reporting by Martinne Geller, editing by Dave Zimmerman)

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