Kraft income up 4% in second quarter

by FoodBusinessNews.net Staff
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NORTHFIELD, ILL. — Gains from operations and commodity hedging activities helped contribute to a 4% increase in quarterly earnings for Kraft Foods, Inc.

For the second quarter ended June 30, the company posted net earnings of $732 million, equal to 49c per share on the common stock, up from $707 million, equal to 45c per share, during the same quarter of the previous year.

Revenue was $11,176 million up 21% from $9,205 million during the same quarter of the previous year.

"Our business continues to strengthen in a challenging operating environment, and performance is exceeding our expectations," said Irene Rosenfeld, chairman and chief executive officer. "Our investments are driving stronger top-line growth, and we are now seeing that play through in improved profitability. I expect our year-over-year results to improve further in the back half of 2008 as we continue to reinvest in our brands and reduce our costs."

In North America, operating income was up 16% in the quarter, driven by a 51% increase in the U.S. cheese segment. Net revenue for the North American segment was up 7%, driven by a 10% increase in the U.S. cheese segment.

For the six months ended June 30, the company had net earnings of $1,340 million, equal to 89c per share, down 5% from $1,409 million, equal to 88c per share, during the same period of the previous year. Revenue for the six months was $21,548 million, up 21% from $17,791 million during the same period of the previous year.

The company said it now expects full-year 2008 earnings per share results to be at least $1.54 per share, down from $1.56 per share as the result of the divestiture of biscuit assets. Kraft also said its 2008 organic net revenue growth outlook is at least 6%.

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