Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Kraft's 1st-quarter net income rises as cost cutting offsets decline in sales

NEW YORK, N.Y. - Kraft reported a higher profit for its first quarter on Thursday as cost-cutting and one-time benefits helped offset a decline in revenue.

The maker of Lunchables, Oscar Mayer and Velveeta partly attributed the lower revenue to the timing of Easter-related shipments, which were pushed into the second quarter this year instead of the first quarter.

CEO Tony Vernon also said in a conference call that the company continued to be negatively impacted by cuts to the SNAP food stamps program in the first three months of the year. He also noted that higher tax bills seem to be hitting middle- to upper-income consumers. Still, Kraft plans to significantly raise prices on a number of products to cover rising costs for ingredients.

More broadly, Kraft is facing intensifying competition for a number of its products. Its namesake macaroni and cheese, for example, is being challenged by smaller players that position themselves as having higher-quality ingredients. Kraft is also working to try and refresh the outdated images of products including Kool-Aid, but the results have been mixed.

Despite the lack of encouraging results for Jell-O so far, Vernon stressed that there was "more to come" on the product line and that analysts and investors should "stay tuned."

Kraft Foods Group Inc., based in Northfield, Illinois, split from Mondelez International in late 2012. The idea was to let each company have a more focused group of products; Mondelez took snacks like Oreo and Chips Ahoy that are seen to have bigger potential for growth around the world. Kraft was left with grocery staples that are sold in the saturated North American market.

For the January to March period, Kraft earned $513 million, or 85 cents per share. Not including one-time items such as a benefit from hedging activities related to its commodity costs, the company earned 78 cents per share. Wall Street expected 76 cents per share.

A year ago, Kraft earned $456 million, or 76 cents per share.

Revenue fell 3.3 per cent to $4.36 billion, short of the $4.47 billion analysts expected, according to FactSet.

In after-hours trading, Kraft shares added 10 cents to $56.79.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Sudden Surge: Flood of 2014
Opportunity Magazine — The Bakken
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates