Earlier today, the Street was abuzz with rumors that Kraft Foods (NYSE: KFT) was investigating the sale of brands such as Maxwell House and Oscar Mayer in order to raise capital to up its Cadbury (NYSE: CBY) bid to something a little bit sweeter (and one the confectionery giant might not reject).

Kraft responded to the rumors saying they were just that - unfounded conjecture - and noted that it would not in fact need to ditch hot dogs and coffee for creme eggs and Trident gum. A spokeswoman for the company told Reuters "The financing for this proposal does not require any divestitures." So where did these rumors get started, anyway? Is Kraft protesting too much?

The world's second-largest food company, Kraft Foods (NYSE: KFT), bellied up to the earnings buffet this morning to announce second-quarter results. The parent of such household brand names as Oscar Mayer, Nasbisco, and Post said that its profit rose nearly 4% to $707 million, or 44 cents per share. Excluding items, Kraft banked 50 cents per share, 3 pennies above analysts' expectations.

Quarterly sales rose 6.8% to $9.21 billion, trumping Wall Street's sales target of $8.97 billion. North American sales were 2% higher during the reporting period, with sales in the beverage unit improving by 4.3%.

According to MarketWatch, sales of new products, including new Crystal Light flavors and Nabisco 100-calorie snack packs, helped offset challenges from rising dairy costs and increased marketing expenses.

Dow Jones reports that Kraft officials now expect organic net revenue growth of at least 4% in 2007, a slight improvement from earlier estimates of 3% to 4%. Full-year earnings before items remain estimated in a range between $1.75 and $1.80 per share.

In early-morning trading, Kraft shares have gained about 1%. The stock is attempting to muscle back above its 80-week moving average, which KFT breached yesterday for the first time since April.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.