By RTT News,
May 01, 2014, 06:55:00 PM EDT
(RTTNews.com) - Kraft Foods Group Inc ( KRFT ) Thursday reported an increase in first-quarter profit, helped by improved gross margins and hedging gains, with earnings topping Wall Street estimates.
Nonetheless, the packaged food giant's revenue declined and fell short of expectations due to the shift in timing of Easter shipments into the second quarter and customers adjusting their inventories.
For the first quarter, Northfield, Illinois-based Kraft Foods posted net earnings of $513 million or $0.85 per share, compared with $456 million or $0.76 per share last year.
Results for the recent quarter included $0.02 per share gain from retirement benefit plans and $0.05 per share of hedging gains.
On average, 16 analysts polled by Thomson Reuters expected earnings of $0.76 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter slid 3.3 percent to $4.36 billion from $4.51 billion a year ago. Thirteen analysts had a consensus revenue estimate of $4.45 billion for the quarter.
Segment-wise, Kraft's cheese sales grew 2 percent from last year amid price increases. Refrigerated meals were almost flat as momentum in Lunchables offset volume softness in cold cuts and bacon.
Beverages sales fell 5.3 percent due to lower pricing and increased merchandising activity. Meals & Desserts sales declined 7.8 percent, Enhancers & Snack Nuts fell 5.5 percent, and Canada sales dropped 11.4 percent. Other businesses edged down 1.4 percent.
Kraft in 2012 split from parent Kraft Foods Global Inc, with the international snacks unit named Mondelez International Inc ( MDLZ ).
While Kraft focuses on North American grocery operations which has somewhat matured, Mondelez was left with international snack and confection business, with strong potential in emerging markets.
Kraft stock closed Thursday at $56.69, down $0.17 or 0.30%, on a volume of 2.4 million shares on the Nasdaq. In the past year, the stock has traded in the range of $50.04 - $58.76.
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