( KFT) posted a jump in first-quarter earnings, boosted by a gain from a tax settlement, but revenue growth continued to be sluggish and volume declined.
The food company's overall net income surged to $1.01 billion, or 61 cents a share, from $713 million, or 42 cents a share, last year. The latest quarter's per-share earnings included a 24-cent gain related to a tax resolution from Kraft's parent,
, as well as 9 cents in restructuring-related charges.
Excluding items, Kraft posted earnings of 45 cents a share, beating Thomson First Call's mean analyst estimate by 3 cents.
Kraft's revenue edged up 0.8% to $8.12 billion from $8.06 billion, slightly shy of analysts' forecast of $8.17 billion. The company said the top line was hurt by divestitures and foreign exchange. Meanwhile, organic revenue rose 3.6%. Volume fell 1.1%, excluding the effects of divestitures, amid declines in the grocery, cheese and beverage segments.
The company, whose products include Miracle Whip dressings, Oreo cookies and Oscar Mayer luncheon meats, is in the midst of a multiyear restructuring plan aimed at cutting costs and simplifying its brands. Kraft said it saved $100 million in the quarter because of the restructuring.
"Our Brand Value propositions strengthened with successful new products, quality enhancements and marketing initiatives," said CEO Roger Deromedi in a press release. "We continued to drive out costs and simplify our business. While input costs and the EU remain challenging, I'm confident that our momentum will continue to build as 2006 progresses."
Kraft reiterated its forecast for 2006 earnings of $1.55 to $1.60 a share, including 50 cents in restructuring-related charges and the Altria tax gain. Analysts project earnings of $1.88 a share, before the items. The company sees organic revenue growth of 3% or greater for the year.