Shares of the nation's largest food and beverage maker, Kraft Foods Inc. (NYSE: KFT), have been surging in morning trading despite posting a decline for its first-quarter profit, as its earnings numbers were better than analysts had forecast.
For the quarter, Kraft Foods announced that its profit dropped 13% to $608 million, compared with $702 million a year earlier, dragged down by higher expenses for ingredients. The 2007 earnings results included a one-time interest benefit related to the spin-off from Altria Group Inc. (NYSE: MO). On an adjusted basis, the company posted quarterly earnings of 44 cents per share, slightly higher the 40 cents per share that analysts expected.
The food giant posted solid growth in its first-quarter revenue, which climbed to $10.37 billion, up from $8.59 billion reported in the same period a year ago. Analysts had forecast lower revenue of $9.77 billion in the quarter, according to Thomson Financial. The increase in revenue came as the company benefited from both the weak dollar and gains related to acquisitions.
Kraft Foods had a a pretty difficult year as higher energy costs and increased expenses for dairy weighed on the company's earnings. Looking ahead, the food producer showed optimism and backed its full-year earnings outlook for a per-share profit of at least $1.90 a share excluding charges. For revenue, Kraft predicted growth of at least 5%.
In reaction to the company's positive earnings and its optimistic guidance, investors have pushed its shares 3.70% higher so far today.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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