By Tess Stynes
Kraft Foods Inc. (KFT) provided its outlook for its snacks
business, which will be called Mondelez after the food company
spins off its North American grocery business next month.
After the split, set for Oct. 1, the company's grocery segment
will be called Kraft Foods Group Inc.
Kraft Chairman and Chief Executive Irene Rosenfeld said "we're
now ready to unleash a global snacking powerhouse" as she outlined
long-term targets for organic revenue growth of 5% to 7% and
operating earnings growth in the double digits on a percentage
basis at a conference Thursday.
Chief Financial Officer Dave Brearton said "these rates are
higher than our previous long-term targets for Kraft Foods prior to
the spin."
For next year, the company forecast operating earnings on a
per-share basis of $1.50 to $1.55, also on organic revenue growth
of 5% to 7%.
Mondelez, whose snack brands such as Oreo cookies and Cadbury
chocolates enjoy rosier growth prospects in emerging markets, will
have to navigate a treacherous economic environment in Europe and
worries that developing markets may slow somewhat. The grocery
business, meanwhile, will be faced with operating in a slow-growth
packaged-food sector where consumers remain frugal, although it
will be charged primarily with widening margins and returning cash
to shareholders through fat dividends.
On Thursday, the company said that while spinoff-related costs
are expected to be in line with earlier forecasts, Mondelez
restructuring costs are now expected to come in higher than
previously anticipated, reflecting added restructuring programs in
the U.S. and Europe.
Shares were down 41 cents at $41.90 in recent after-hours
trading.
Write to Tess Stynes at Tess.Stynes@dowjones.com
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