February 22, 2012- Earnings for the fourth quarter increased 54% at Kraft Foods Inc., the company reported Monday. Income was helped by higher prices nevertheless, an increase in costs cut into its margins. Kraft said they have launched new products that have been successful and that has helped to stave off some of the weakness in the market.
Irene Rosenfeld, the CEO of Kraft said, “Our portfolio is broad enough and enough of it has been successful that we ended up with the good results we did.”
Other packaged-foods companies had warned of a huge slump in sales throughout the recent holidays. Reason cited were consumers buying less because of high prices, inventories held low by retailers and not as many new products launched in 2011 as in previous years.
Kraft said it too had been hit by the dip in sales, especially to lower-income households. Kraft, well known for its Planters nuts, Oscar Mayer brand lunch meats and Kraft cheeses, has succeeded in increasing prices better than its competitors have. Organic sales for Kraft increased 6.1% for the fourth quarter because of a price increase of 7.6% even though volume was down 1.5%.
Kraft is scheduled to split later in the year when a global snacks business will be created along with one that will focus on grocery products in North America. The company’s results yesterday were barely ahead of preliminary figures they released late last month. Kraft shares increased to $38.53 on Monday after the announcement in the early afternoon.