Kraft Foods today (4 February) cut its sales and profit forecasts for 2009 as it posted a 9% fall in underlying net earnings for the fourth quarter of 2008.
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The US-based food giant blamed foreign exchange and higher pension costs and added that falling input costs would mean prices would contribute less to sales than expected.
Kraft, which owns brands including Philadelphia cheese and Milka chocolate, said it now expects to see net revenue grow by around 3% on an organic basis during 2009, down from its previous forecast of 4%.
The company also estimated that earnings per share would reach US$1.88 against a previous forecast of at least $2 a share.
Excluding one-time items, including least year’s sales of its Post cereals business, Kraft’s net earnings for the three months to 31 December fell 8.9% to $628m.
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By GlobalDataFourth-quarter net sales rose 6.2% to $10.8bn thanks in part to last year’s acquisition of Danone’s LU biscuit business.
Organic net sales growth stood at 4.4% due to price increases across the Kraft portfolio. Group-wide volumes were down 5.2% as the price hikes hit US volumes in categories including cheese and snacks. Operating income in North America rose 10.4%, Kraft said.
Volumes in the EU also fell, although Kraft said quarterly revenue in the region rose 2.3%. The company pointed to “solid growth” in chocolate, particularly in Germany, Austria and Poland. Operating income in the region rose 25.3%, buoyed by the LU biscuit business.
In Kraft’s “developing markets”, sales rose 15.3% on an organic basis thanks to revenue growth in Eastern Europe, the Middle East and Africa, as the company invested behind its chocolate and coffee operations.
Price increases on biscuits and chocolate drove a rise in revenue in Latin America, while gains in biscuits also pushed up Kraft’s turnover in Asia Pacific.
Operating income from the “developing markets” business unit rose 29.6%.
