NORTHFIELD (ILLINOIS) (dpa-AFX) - Kraft Foods Inc. (KFT), the world's second largest food company, said Thursday after the markets closed that its first quarter profit edged up 1.8%, helped by Power Brands, new products and better cost control.
The company's quarterly earnings per share, excluding items, also just managed to beat analysts' estimate as did its quarterly revenue.
Looking forward, the company said it continues to expect 2012 organic net revenue growth of about 5% and operating earnings per share growth of at least 9% on a constant currency basis.
Kraft shares remained unchanged in after hours trading after closing the day's regular trading session at $39.59, down 11 cents. The shares trade in a 52-week range of $31.88 to $39.99.
Organic net revenues for the quarter increased 6.5%, driven by 11% growth from Power Brands. Pricing contributed 5.5 percentage points of growth as the company continued to successfully implement pricing actions to recover higher input costs. Volume/mix contributed 1.4 percentage points to growth.
First quarter Kraft Foods North America net revenues grew 1.3% year-over-year to $6.0 billion, with organic net revenue growth of 3% led by higher pricing across each business segment, partially offset by lower volume/mix.
Kraft Foods Europe net revenues rose 4.5% to $3.2 billion in the first quarter, with organic net revenue up 7.2%. Power Brands grew nearly 11%. First quarter Kraft Foods Developing Markets net revenues surged 8.5% to $3.9 billion, while organic net revenue rose 11.5% due to both higher pricing and volume/mix growth.
For the first quarter ended March 31, 2012, the Northfield, Illinois-based company reported net income of $813 million or $0.46 per share, compared to $799 million or $0.45 per share for the year-ago quarter.
Excluding integration program costs, spin-off costs and restructuring program costs, operating earnings for the first quarter were $0.57 per share, compared to $0.52 per share in the prior year quarter.
On average, 17 analysts polled by Thomson Reuters expected the company to earn $0.56 per share for the first quarter. Analysts' estimates typically exclude special items.
The maker of Maxwell House coffee and Oreo cookies said net revenue for the first quarter rose 4.1% to $13.09 billion from $12.57 billion in the same quarter last year. Fourteen analysts had a consensus revenue estimate of $13.05 billion for the first quarter.
In August, Kraft said it planned to create two publicly traded companies through a tax-free spin-off of the North American grocery business to Kraft shareholders.
Global snacks business will consist of the current Kraft Foods Europe and Developing Markets units as well as the North American snacks and confectionery businesses. The North American grocery business will comprise the current U.S. Beverages, Cheese, Convenient Meals and Grocery segments and the non-snack categories in Canada and Food Service.
Kraft plans to launch the new companies before the end of 2012.
After the spin-offs, North American grocery company will become Kraft Foods Group Inc., retaining the Kraft brand for its corporate identity. Kraft plans to name its global snack food business Mondelez International Inc. after the separation.
The company last month filed an initial Form 10 registration statement with the U.S. Securities & Exchange Commission regarding the spin-off.
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