April 28--Kraft Foods Group's first-quarter profit fell more than 16 percent on flat sales as it waits to be acquired by H.J. Heinz.
Heinz announced its plan to buy Kraft on March 25, a move that would give the ketchup maker the chance to grow its list of staples and bring Kraft brands into international markets. The deal stands to create the world's fifth-largest food and beverage company.
"We've stepped up our focus on execution," Chairman and CEO John Cahill said in a statement, adding "there is clearly more work ahead of us."
Kraft, which makes products such as Kraft macaroni and cheese and Oscar Mayer meats, earned $429 million, or 72 cents per share, in the latest quarter, down from $513 million, or 85 cents per share, a year earlier. Kraft's first quarter ended March 28, just days after Heinz announced plans to buy the company.
Northfield-based Kraft said the quarter included 14 cents per share in charges, including 4 cents per share on cost-cutting, and 2 cents per share related to the proposed Heinz deal.
Excluding the costs, the company's profit beat Wall Street's expectations.
Revenue slipped 0.2 percent to $4.35 billion, but rose 1.1 percent stripping out factors such as foreign exchange fluctuations. The launch of McCafe coffee in a pact with McDonald's helped reduce the blow of price increases and weak sales of some other items. Analysts, on average, anticipated revenue of almost $4.43 billion.
Revenue in cheese, the company's largest division, rose 1.3 percent to $1.02 billion, aided by previous price increases, the timing of shipments ahead of Easter and last year's overhaul of the Philadelphia cream cheese tubs. Revenue in meals and desserts, which includes products such as Jell-O, fell 2 percent to $488 million.
jwohl@tribpub.com
