NORTHFIELD, Ill. (AP) — Kraft Foods Inc. said Tuesday that its fourth-quarter net income rose 54 percent as its price increases helped offset higher costs.
The company, whose brands include Nabisco, Maxwell House and Trident, and the rest of the food and beverage industry are coping with higher costs at a time when consumers in developed markets like the U.S. are limiting spending.
Higher prices boosted results during the quarter but gross margin — the percentage of each dollar in revenue a company actually keeps — edged down as costs remained high.
Net income for the three months ended Dec. 31 rose to $830 million, or 47 cents per share, from $540 million, or 31 cents per share, a year ago. Excluding one-time costs, its earnings were 57 cents per share, matching analyst expectations, according to FactSet.
Revenue rose nearly 7 percent to $14.69 billion from $13.77 billion. Analysts expected $14.8 billion.
The company based in Northfield, Ill., is in the process of splitting its business into two publicly traded companies, cutting 1,600 jobs in the process. One will focus on its international snack brands like Trident gum and Cadbury chocolates while the other will concentrate on its North American grocery business that includes Maxwell House coffee and Oscar Mayer meats. The deal is expected to be complete at the end of the year.
The company said it expects costs of $1.6 billion to $1.8 billion from the restructuring. It also could take $400 million to $800 million of debt breakage and financing fees related to moving debt to the North American grocery company.
For the year, net income fell 14 percent to $3.55 billion, or $1.99 per share, from $4.11 billion, or $2.39 per share last year.
Revenue rose nearly 11 percent to $54.37 billion from $49.21 billion last year.
Its shares rose 44 cents, or 1.1 percent, to $38.45 in premarket trading Tuesday. Its shares have traded in a range of $30.43 to $39.06 over the past year.