Northfield-based Kraft reported strong earnings of 47 cents per share on Thursday afternoon. But the company’s sales, up 26.6 percent to $11.9 billion, just missed expectations of $12 billion. Analysts had expected earnings of 46 cents per share.
Earnings for the world’s second-largest food company were lower than the year-ago period, of 55 cents, because of increased advertising investment, higher taxes, and commodity cost increases.
“We had another good quarter, and we’re executing well,” Kraft CEO Irene Rosenfeld said in a statement. “The Cadbury integration has proceeded smoothly and quickly, and we’re already benefiting from significant cost synergies. I remain confident that we will achieve our goals for 2010 and accelerate our growth in 2011.”
Sales from the pre-merger Kraft business grew 1 percent. The company cited higher prices, a persistently weak consumer environment, and less in-store promotions.
During a call with analysts, the company was peppered with questions about price increases put into effect in the third quarter and more in store for the fourth quarter. Rosenfeld said she doesn’t anticipate much more increases for 2011. However, as Kraft is the leading the charge on higher prices, Rosenfeld said she expects competitors to follow suit.
“Costs are going up for everyone,” she said. “And we would expect price gaps will narrow was [the first quarter] progresses.”
