Kraft Foods Group reported quarterly earnings Thursday that surpassed analysts' expectations but revenue slipped on weak sales of cold cuts and salad dressings.
The company, which makes Miracle Whip, Oscar Mayer and other staples found in American pantries, raised its guidance for the year, citing a one-time benefit to its pension plans.
The decline in sales comes as Kraft looks to find its way as an independent company after the company was split in two — Kraft Foods and Mondelez International — last year. Kraft took grocery brands primarily sold in North America while Mondelez took global snack brands that are expected to grow at a faster rate, such as Oreo.
Kraft, based in Northfield, Ill., has said that it's embracing the spirit of a start-up company to drive big innovations and refresh older brands such as Jell-O.
But for the three months ended June 29, Kraft blamed its sales drop on a variety of factors. It noted that prices fell in its beverages unit as a result of increased promotions. It also noted that it got rid of some products that weren't big sellers, reducing the contribution to sales.
For the period, the company earned $829 million, or $1.38 per share. That's compared with $603 million, or $1.02 per share, a year-ago.
Excluding the impact related to the pension plans, the company earned 76 cents per share. Wall Street was looking for 66 cents per share, excluding one-time items, according to a consensus estimate from Thomson Reuters.
Revenue fell to $4.7 billion, short of the $4.82 billion Wall Street expected.
The company raised its full-year earnings forecast to $3.40 a share from its prior estimate of $2.75 a share, citing a one-time benefit related to its pension plans. Analysts currently expect $2.78 a share.
After the earnings announcement, the company's shares rose nearly 1 percent in after-hours trading. What is Kraft Foods stock doing now? (Click here to get the latest after-hours quotes.)