Kraft Foods: Q3 earnings hit by commodity costs

US food manufacturer Kraft Foods has reported a 13.5% fall in third-quarter earnings, hit by commodity and energy costs. The company posted net earnings of US$674m, or 40 cents per share, for the quarter to 30 September, compared to $779m, or 46 cents per share, for the same period of the previous year. Earnings from continuing operations were down 12% from $766m. The reduction in earnings was due to significantly higher commodity and energy costs and a prior year tax favourability.

Net revenues increased 4.4% to $8.06bn, with ongoing constant currency revenues up 3.6% from broad-based growth in North America, Europe and developing markets. Top-line growth reflected a balance of volume gains, positive product mix and commodity-driven price increases. Kraft reduced its full-year 2005 earnings guidance to $1.68 - $1.71 from $1.73 - $1.78, reflecting higher-than-expected energy, packaging and dairy costs.