WASHINGTON (dpa-AFX) - Packaged food giant Kraft Foods Group Inc. (KRFT), Thursday reported a decline in profit for the first quarter, despite a growth in revenues, hurt by higher interest expenses and restructuring costs. Nevertheless, both earnings and revenues for the quarter came in ahead of Wall Street estimates, helped by increased sales and lower costs.
Northfield, Illinois-based Kraft Foods' first-quarter profit dropped to $456 million or $0.76 per share from $483 million or $0.82 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.64 per share for the quarter. Analysts' estimates typically exclude special items.
Interest expense in the quarter was $123 million or $0.13 per share, reflecting the company's capital structure as an independent company. The first quarter also included restructuring charges of $0.12 per share.
This is the third quarter Kraft is reporting results after becoming independent. Kraft was formed when the original parent entity Kraft Foods Global Inc. split into two companies last year, with its international snacks business, called Mondelez International Inc. (MDLZ), and North American grocery business -- Kraft Foods Group Inc.
Kraft Foods, which makes of Kraft Cheese, Maxwell House coffee, and Oscar Mayer deli meats, said its revenues for the quarter grew 2.1 percent to $4.55 billion from $4.45 billion a year ago. Ten analysts had a consensus revenue estimate of $4.49 billion for the quarter.
Chief Executive Tony Vernon said, 'Our first quarter results reflect strong returns on our new product innovations to date, as well as the fact that our cost savings outpaced our plans to reinvest in our brands.'
Operating profit for the period rose 9.2 percent reflecting productivity gains, lower overhead costs, better product mix and volume growth.
Selling, general and administrative expenses dropped 5.7 percent.
Going ahead, the company maintained its full-year 2013 outlook and continues to expect earnings in the range of about $2.75 per share on organic revenue growth in line with growth of the North American food and beverage market. Analysts currently expect earnings of $2.78 per share for 2013.
KRFT closed Thursday's trading at $50.53, down $0.54 or 1.06%, on the Nasdaq. The stock, however, gained $0.97 or 1.92%, in after hours trade.
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