Dive Brief:
- Kraft Foods posted a net income of $513 million in the first quarter, well above the $456 million seen a year earlier and higher than analysts expected.
- Revenue dropped 3.3% to 4.36 billion.
- The company said sales of its Lunchables brand were strong, but sales were poor for refrigerated meats, beverages, and ready-to-eat Jell-O desserts.
Dive Insight:
Kraft's first-quarter earnings report, despite the solid number in the bottom line, reads like a cautionary tale. First, the company warns that it sees trouble ahead in 2014 due to a slow recovery and recent cuts to food stamps. Second, the good news in the report is all from difficult-to-repeat and noncore activities, i.e, cost cuts and price hedging.
As mentioned this week, Kraft is still looking for ways to trim costs. That's great. But some worry how long such moves can continue.