Kraft Foods Q2 net earnings up 11 percent

Kraft Foods Inc. on Tuesday reported an 11-percent increase in net earnings during its fiscal second quarter, citing price increases and cost-cutting measures related to restructuring efforts.

CEO Irene Rosenfeld said the company is on track to deliver strong top- and bottom-line results, restore profit margins to industry averages and consistently deliver against long-term earnings growth target of 7 percent to 9 percent.

For the quarter ended June 30, Kraft said its profit was US$829 million, or 56 cents per share, compared with US$747 million, or 49 cents per share, in the same quarter last year. Sales fell 6 percent to US$10.2 billion, including unfavourable impacts from currency and divestitures.

Analysts on average expected earnings of 54 cents per share on sales of US$10.4 billion.

Oscar Mayer, a unit of Kraft's US Convenient Meals division, continued to help the parent company's success. Along with DiGiorno pizza, Oscar Mayer Deli Fresh meats grew at least 20 percent. The division's organic net revenues increased 7.1 percent on higher price levels and improved volume/mix, the company said.

Kraft boosted its 2009 earnings guidance to at least US$1.93, up from an earlier forecast of US$1.88 per share.