Shares in Kraft Foods jumped by more than 6% this morning after the US food giant posted a rise in first-quarter profits.
Chairman and CEO Irene Rosenfeld hailed “a very solid start” to the year at Kraft, which posted a 10% increase in net earnings for the three months to the end of March.
Net earnings climbed 10.1% to US$662m, while operating income rose 18.8% to $1.27bn. Strong profit growth from Kraft’s US cheese and convenient meals division helped offset a fall in profits from its Canada and North America foodservice unit.
Kraft’s healthy-looking first-quarter numbers also included a 290 basis point rise in margins to 13.5%, while earnings per share from continuing operations jumped 29% to $0.45.
Kraft said margins were boosted by the lack of any restructuring charges in this year’s first quarter, as well as its decision to discontinue “less profitable product lines”.
Shares in Kraft stood at $25.80 at 10:18 ET, a rise of 6.3%.
“Our business momentum remains strong despite a challenging consumer environment,” Rosenfeld said. “We are intensely focused on investing our cost savings to build our core brands, improve our product mix and drive superior retail execution. This will further enhance our profit margins and improve market shares as the year unfolds.”
Nevertheless, Kraft said it saw volume/mix dip 3.4% with price hikes boosting a 2.3% rise in revenues on an organic basis.
On a reported basis, net revenues fell 6.5% to $9.4bn, thanks largely to currency fluctuations.