Q2 Profits Climb, Revenues Decline
NORTHFIELD, IL -- On Oct. 1, Kraft Foods Inc. will spin off of its North American grocery business, Kraft Foods Group Inc., from its snacks business, which will become Mondelez International Inc.
The maker of Oreo cookies and Maxwell House coffee also named the board members of the two future independent companies. As previously announced, Kraft chief executive Irene Rosenfeld will be chairman and chief executive of Mondelez International Inc. John Cahill will become executive chairman of Kraft Foods Group Inc. and Tony Vernon, currently executive vice-president and president of Kraft Foods North America, will be its chief executive.
The Northfield, IL, food giant also announced that Tracey Belcourt will join the company as executive vice-president of strategy in September. She will direct the strategy function and mergers and acquisitions for Mondelez following the spin-off. Belcourt has been a partner at Bain & Co. in Toronto since 1999.
The company recently named Kim Rucker will serve as general counsel of the future North American grocery company. | SEE STORY
Separately, Kraft reported that second quarter profits climbed 5% over the same period last year, helped by price increases, while revenues fell 4.3%.
For the second quarter, ended June 30, Kraft reported net income of $1 billion, or 58¢ a share, compared with $976 million, or 55¢ per share, for the year-ago quarter.
The food company said net revenues in the second quarter fell 4.3%, from $13.88 billion a year ago to $13.29 billion, due to unfavorable foreign currency translation and accounting calendar changes in the prior-year quarter.
Kraft Foods North America's quarterly net revenues grew 1.2% to $6.4 billion, with organic net revenue growth of 1.7% led by higher pricing across each business segment.
Kraft Foods Europe net revenues fell 14.8% to $3 billion year over year, with organic net revenue up 1.4%. Net revenues in developing markets declined 3.6% to $3.9 billion, while organic net revenue rose 7.6%, driven by a balance of higher pricing and volume growth.
The company confirmed its 2012 guidance of about 5% organic revenue growth and at least 9% for operating earnings.
Beginning Oct. 2, Kraft Foods Group and Mondelez International will trade on the Nasdaq under the ticker symbols "KRFT" and "MDLZ."