US food giant Kraft Foods has posted a 6.8% fall in quarterly profit, hit by higher marketing costs and weaknesses in its cookies and European chocolates businesses.
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Northfield, Illinois-based Kraft reported earnings of US$810m, or 47 cents a share, for the third quarter to 30 September, compared to $869m, or 50 cents a share, a year earlier. Analysts had been expecting, on average, earnings of 46 cents a share, reported Reuters.
Sales increased 3.7% to $7.48bn, but shipment volume fell 0.2%. Kraft’s sales in North America edged up 1.9% to $5.33bn, while international sales rose 8.2% to $2.15bn, boosted by favourable exchange rates.
The company has been lowering prices in certain categories, such as cheese, in order to compete with private label goods amid the weak US economy. Kraft also said that operating margins had been put under pressure by higher commodity prices, and that the heat wave in Europe had hit its coffee and chocolate businesses there.
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