US food manufacturer Kraft Foods has reported a 27.7% fall in fourth-quarter profit, as its earnings were dented by restructuring charges and higher commodity costs.

The company reported net earnings of US$628m, or 37 cents per share, for the fourth quarter of 2004, compared to $869m, or 50 cents per share, for the same quarter of the previous year.

Quarterly net revenues were $8.78bn, compared to $8.21bn a year earlier, a 7% increase the company attributed to strong results in North America and actions taken to build the value of its brands, transform its portfolio in line with consumer trends, and to drive out costs and assets.

"Kraft enters 2005 with improved momentum, fuelled by strong revenue growth in the fourth quarter," said chief executive Roger Deromedi.

"We were particularly encouraged by the strong performance of our North American business, which grew fourth quarter revenues by more than 8%. In a transition year in which we reorganised the company and began a significant restructuring programme, we sequentially improved our top-line growth each quarter and are now in a better position to deliver sustainable growth going forward," he added.

Looking ahead, the company said it remained committed to its Sustainable Growth Plan in 2005.

"Our pipeline of new products and our marketing programmes are stronger than ever, and our cost restructuring programme is on track. We project high quality earnings growth, reflecting additional marketing investments, even as we manage through an environment that continues to present significant challenges. The most significant among these challenges are benefits, packaging and energy cost increases, a difficult European retail environment, and the need to price certain businesses because of higher commodity costs," Deromedi said.