Kraft Foods Misses Q2 Views; Revenue Grows Just 0.7%

Kraft Foods Group Inc.

second-quarter profits fell 42 percent and missed Street estimates while the company complained about difficulties in growing its revenue. Kraft cited a raft of woes ranging from record-high dairy costs, currency impact and even Jell-O weakness to account for its performance. "There's no question that economic and consumer trends are creating top-line growth challenges for the food and beverage industry," Kraft Chief Executive Anthony Vernon said. The company aims for profitable growth through "brand renovation, innovation, marketing and cost management," Vernon said. Earnings fell to $482 million, or $0.80 cents a share from year-earlier profit of $829 million, or $1.39 a share. Revenue grew just 0.7 percent to $4.75 billion, from $4.72 billion last year. Analysts expected profit of $0.83 cents a share on revenue of $4.84 billion. Chees revenue was up 1.6 percent to $952 million; refrigerated meals revenue grew 2.6 percent to $916 million and beverage revenue was flat at $748 million. Deserts and meals were down 5 percent to $581 million, mainly because of "continued weakness in ready-to-eat Jell-O" as well as promotional costs. In the extended session Kraft recently traded at $57, down 0.42 percent.