Kraft Foods Inc. (KFT) reported net income for the second quarter of $1.0 billion or $0.58 per share, compared to $976 million or $0.55 per share for the year-ago quarter.
Excluding items, operating earnings for the second quarter were $0.68 per share, compared to $0.62 per share in the prior year quarter.
Net revenues in the second quarter fell 4.3% to $13.29 billion from $13.88 billion a year ago, due to a 5.0 percentage point headwind from currency and a negative 2.7 percentage point impact due to the benefit of accounting calendar changes in the prior year quarter.
Analysts polled by Thomson Reuters expected the company to earn $0.66 per share on revenue of $13.96 billion for the second quarter. Analysts' estimates typically exclude special items.
Commenting on the company's outlook, David Brearton, Kraft's Executive Vice President and CFO, said, "Our first half results are on-track with our previous annual guidance of Organic Net Revenue growth of approximately 5 percent and Operating EPS growth of at least 9 percent on a constant currency basis."
The company also said it plans to spin-off to its shareholders its North American grocery business, Kraft Foods Group, Inc., on October 1.
At the time of the spin-off, each of the company's shareholders entitled to receive shares of Kraft Foods Group will receive one share of Kraft Foods Group for every three shares of Kraft Foods Inc. The record date is not yet finalized, but is expected to be in mid-September. The common stock for both companies are expected to begin trading on a "when-issued" basis shortly before the record date.
Beginning October 2, Kraft Foods Group will begin to trade on The Nasdaq Global Select Market under the ticker symbol "KRFT." Kraft Foods Inc. will change its name to Mondelez International, Inc. and change its ticker symbol to "MDLZ."
In addition, Kraft Foods announced the composition of the boards of directors for the two independent companies that will be launched at the spin-off of its North American grocery business.
Rosenfeld will be Chairman and Chief Executive Officer of the global snacks company, Mondelez International, Inc. Cahill will be Executive Chairman of the North American grocery company, Kraft Foods Group, Inc., and Vernon, currently Executive Vice President and President, Kraft Foods North America, will be CEO.
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by RTT Staff Writer
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