Kraft Sets Growth Plan, Buyback
Kraft Foods (KFT) outlined a new growth plan and said it plans to buy back up to $5 billion of its stock.
The packaged-foods giant also gave a 2007 profit projection below Wall Street's expectation, sending shares down about 3% Tuesday.
Kraft's turnaround plan calls for it to "rewire the organization for growth," reframe certain categories to make them more relevant to customers, grow its sales and drive down costs.
In 2007, Kraft expects to invest all of its growth, as well as restructuring savings, back into its plan. The maker of Ritz crackers, Oscar Mayer meats and Planters nuts sees 3% to 4% organic revenue growth for the year.Kraft forecast 2007 earnings of $1.75 to $1.80 a share, excluding 25 cents in restructuring costs. Analysts, on average, predict earnings of $1.92 a share. For 2008, the company expects 3% to 4% organic revenue growth, with operating income exceeding revenue growth. "By 2009, we'll hit our stride," CEO Irene Rosenfeld said in a statement. "We'll fully realize the financial benefits of our investments and deliver our long-term targets of at least 4% organic net revenue growth and 7% to 9% EPS growth." Separately, Kraft said it will buy back $5 billion of its stock following its spinoff from Altria Group (MO) next month. Altria currently owns 89% of Kraft, and the holding company plans to distribute the shares March 30. The buyback program will run over the next two years. Shares of Kraft recently were down 94 cents to $34.01.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV