Kraft Foods Inc., the foodmaker splitting in two this year, reported first-quarter profit rose 1.8 percent, topping analysts’ estimates, as sales gained in developing markets and Europe, Bloomberg reported.
Net income in the quarter climbed to $813 million, or 46 cents a share, from $799 million, or 45 cents, a year earlier. Excluding some items, profit was 57 cents a share. The average estimate of 18 analysts was 56 cents. Kraft is benefiting from faster growth in developing markets, where net sales gained 8.5 percent.
The company is separating to help the snacks business push products into markets such as Brazil and China while the slower-growing, higher-margin grocery business returns cash to shareholders. The company also increased sales 4.5 percent in Europe, where some economies have slipped back into recession.
First-quarter organic revenue, which excludes acquisitions, divestitures and foreign-currency fluctuations, increased 6.5 percent, fueled by higher prices. Organic sales increased 3 percent in North America, 12 percent in developing markets and 7.2 percent in Europe.
In Europe, Kraft drove growth by investing in its most popular brands and getting more production out of the sales force it inherited from its acquisition of Uxbridge, England- based Cadbury Plc, according to Chief Executive Officer Irene Rosenfeld.
The spinoff will leave a global snacks and candy business led by Rosenfeld. The business, which will be renamed Mondelez International Inc., will have about $31 billion in annual revenue from brands including Cadbury chocolate and Oreo cookies.
The grocery company, which may have about $18 billion in revenue, will be led by Tony Vernon, who’s currently president of the North American foods division.
