Kraft Foods Group has booked lower earnings in the first nine months of the year as one-off expenses, input costs and lower sales volumes weighed on profits.
Operating income in the nine months to 27 September fell to US$2.5bn, down 18.6% from $3.08bn in the comparable period of last year. Net earnings were down 19.2% to $1.44bn, the company said in a trading update late yesterday (29 October).
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Profits were hit by one-time items in the third quarter, when the company booked a $26m negative impact from market-based impacts to post-employment benefit plans compared to a $175m benefit in the prior year quarter.
The company also registered a 4.6% increase in cost of goods sold due to higher input costs in the nine months.
While Kraft passed the increased costs along, price hikes weighed on sales volumes. During the third quarter, organic net revenues edged up 0.9%. Pricing offset a 1.2% volume mix decline, which reflected “significant price increases in cheese, meats and coffee, as well as category softness in meals and desserts”, the company said.
During the nine-month period sales were down 0.8% to $13.5bn.
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By GlobalDataShares in Kraft Foods fell 0.59% in trade in New York yesterday and dipped a further 2.83% in after-hours trade following the release of the results.
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