April 20, 2004,
as reported by just-food.com: Food giant Kraft
Foods is reporting a first-quarter drop in profits of
34%. It is believed restructuring changes and increased
marketing investment have led to the slacking numbers.
Net earnings are down 16 cents a share compared to
this time last year. The maker of Kraft cheese, Nabisco
cookies and Oscar Mayer meats posted net earnings of
$560m for the first quarter through March 31, 2004.
For the same period a year ago earnings were reported
The company is already being cautionary in its earnings
projections for the year, warning shareholders to expect
full-year earnings per share to be at the lower end
of its guidance range of $1.63 to $1.70 per share, due
primarily to commodity costs that were higher than originally
"As expected, the company's first quarter earnings
were down versus prior year due to restructuring charges,
increased marketing investment and higher benefit costs,"
said Jim Dollive, chief financial officer of Kraft Foods.
"Costs of many commodities surged during the quarter,
most notably US cheese costs, which reached historical
highs. These higher costs are expected to be a key challenge
for both Kraft and the food industry," Dollive