{"id":13718,"date":"2015-04-29T12:58:12","date_gmt":"2015-04-29T17:58:12","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=13718"},"modified":"2015-04-29T12:58:12","modified_gmt":"2015-04-29T17:58:12","slug":"poor-outlook-for-kraft-foods-after-first-quarter-revenue-decline","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/poor-outlook-for-kraft-foods-after-first-quarter-revenue-decline\/","title":{"rendered":"Poor outlook for Kraft Foods after first quarter revenue decline"},"content":{"rendered":"

By Sara Shouhayib<\/p>\n

Kraft Foods Group Inc.\u2019s net income fell 16 percent and revenue declined slightly in the first quarter as the company dealt with restructuring and other costs associated with its planned merger with The H.J. Heinz Company.<\/p>\n

Kraft said revenues were basically flat as increased shipments of Capri Sun and the launch of McCaf\u00e9 coffee were offset by losses in meals and dessert products.<\/p>\n

For the quarter ended March 28, net income fell to $429 million or $0.72 per diluted share from $513 million or $0.85 from the same period last year. Analysts had expected earnings per share of $0.81.<\/p>\n

Excluding restructuring and merger costs, Kraft\u2019s earnings per share of $0.86 beat the analyst estimate of $0.81. The company credited price hikes and an earlier Easter holiday for gains in adjusted profit.<\/p>\n

Revenues in the quarter fell less than 1 percent to $4.35 billion from $4.36 billion from the same quarter a year ago.<\/p>\n

The company also announced lower marketing spending going forward which concerned some analysts.<\/p>\n

\u201cIt may help near term profit because you know you cut back in advertising expense but eventually leads to weaker sales, trends and so we think it\u2019s going to be extremely difficult for them,\u201d said Brian Yarbrough, analyst at Edward D. Jones & Co.<\/p>\n

\u201cNow once they combine with Heinz, we still think even combined with Heinz it\u2019s going to be a difficult revenue growth environment,\u201d Yarbrough said.<\/p>\n

The company, known for its macaroni and cheese, Maxwell House coffee and Jell-O, announced last week that it will start to make its products without artificial flavors, preservatives or synthetic colors.<\/p>\n

Kraft said it will replace the synthetic orange colors with those derived from natural sources like paprika, annatto and turmeric.<\/p>\n

\u201cThere is clearly more work ahead of us, but we will continue to build on this momentum to delight our consumers and customers, and prepare us for the next chapter ahead,\u201d said Kraft Chairman and CEO John T. Cahill.<\/p>\n

The merger with Heinz is expected to be completed in the second half of 2015. Kraft split off from Mondelez International in 2012.<\/p>\n

Shares of Kraft were trading mid-day at $85.09, down $0.79 from Tuesday\u2019s close.<\/p>\n

Photo at top: Kraft Foods Group Inc. will be merging with The H.J Heinz company in the second half of 2015. (Roadsidepictures<\/a>\/CreativeCommons<\/a>)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Sara Shouhayib Kraft Foods Group Inc.\u2019s net income fell 16 percent and revenue declined slightly in the first quarter as the company dealt with restructuring and other costs associated with its planned merger with The H.J. Heinz Company. Kraft said revenues were basically flat as increased shipments of Capri Sun and the launch of […]<\/p>\n","protected":false},"author":141,"featured_media":13720,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,29,436],"tags":[],"class_list":["post-13718","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-health-and-science","category-spring-2015"],"yoast_head":"\nPoor outlook for Kraft Foods after first quarter revenue decline - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/poor-outlook-for-kraft-foods-after-first-quarter-revenue-decline\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Poor outlook for Kraft Foods after first quarter revenue decline - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Sara Shouhayib Kraft Foods Group Inc.\u2019s net income fell 16 percent and revenue declined slightly in the first quarter as the company dealt with restructuring and other costs associated with its planned merger with The H.J. 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