Kraft sees gain on earnings outlook; Hershey plans solo bid
Kraft Foods Inc., today raised its full-year profit outlook for the second time in two months. It cites the reducement of it’s product lines to just the company’s core brands as a huge factor. This move has paid big for Kraft as it’s big marketing dollars have been shifted back to it’s core brands; products such as Maxwell House coffee and Kraft chesse.
Kraft anticipates 2009 earnings of at least $2 per share, compared with a prior forecast for a profit of at least $1.97 per share. In November, the Northfield, Ill., company increased its guidance to $1.97 from $1.93 per share.
Analysts surveyed by Thomson Reuters, whose estimates generally exclude one-time items, expect full-year earnings of $2 per share. In the ongoing battle bid saga for Cadubury, the English candy maker on Tuesday made its case against Kraft’s $16.5 billion bid, saying its annual results would top estimates. The British company also said it will boost dividend payments by 10 percent.
Kraft’s boosted profit outlook comes at the heels of the announcement that Italian chocolate company Ferrero International SA reportedly has decided it’s not interested in bidding for Cadbury. The Hershey Co. is instead still interested in Cadbury and will be putting together a bid solo. Before the announcement, Hershey had been working on two seperate bids, one involving the Itallian chocolate maker and one without. Hershey has hoped to avoid a bidding war by waiting until Cadbury’s shareholders decide on a competing $16.5 billion bid by Kraft Foods Inc. Kraft has until Feb. 2 to win support from a majority of shareholders. Its deadline to increase its bid is Jan. 19.
Any bid for Cadbury would involve bringing jobs and assets to Hershey and leave voting control of the company in the hands of the charitable trust set up by its late founder Milton S. Hershey, the person said.