Earnings Outlook: What to expect from Kraft Foods’ earnings


Kraft is expected to report sales of $ 4.625 million, above the $ 4.595 million it reported a year ago.

NEW YORK (MarketWatch) — Helmed by a new chief executive, Kraft Foods Group Inc. is scheduled to report fourth quarter earnings Thursday.

The company owns brands including Oscar Mayer, Maxwell House and Velveeta.

Here’s what to expect:

Earnings: Analysts surveyed by FactSet are expecting Kraft KRFT, +0.47%  to report earnings per share of 73 cents, up from 67 cents in the year-earlier period.

Revenue: Kraft is expected to report sales of $ 4.625 billion, above the $ 4.595 billion it reported a year ago. Its cheese segment is expected to bring in $ 1.125 billion and refrigerated meals, $ 777.5 million.

Stock Reaction: Kraft shares have gained 25% over the past year as of morning trade Tuesday, above the S&P 500, which has gained about 14%. In the last month, under a new CEO, Kraft shares gained about 4%.

What to watch for: Its chairman, John Cahill, succeeded Tony Vernon as chief executive at the end of December. Vernon will remain a senior advisor through March 31 and a director until the 2015 shareholder meeting, the company said.

This is change some investors view as “signaling future value creation,” and eyes are on Cahill, formerly the CEO of Pepsi Bottling Group, to see what changes he may make to the company. But Deutsche Bank analysts aren’t convinced it will help.

“We continue to see a tough environment and believe investors are overly optimistic on strategic options,” the analysts said.

In December, the company said its sticking to its full-year outlook and expects to have earnings in line with expectations even with soft consumer demand.

In October, the company reported sales slightly below expectations as it had increases in cheese, refrigerated meals and beverages but declines in its meals and desserts, enhancers and snack nuts and Canadian businesses. It also had increased its prices due to higher commodity costs.

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