KraftÔÇÖs profit falls

Kraft Foods Inc., the worldÔÇÖs second-largest food maker, reported a 72 percent decrease in fourth-quarter profit due to restructuring costs, and said that 2009 earnings will be less than previously forecasted because of the stronger dollar.  Edgar Roesch, an analyst with Soleil Securities, said he had anticipated gains from price increases would help outweigh the negative effects of the dollarÔÇÖs strengthening against other currencies. ┬á ÔÇ£ItÔÇÖs a bit of a disappointment,ÔÇØ said Roesch, who recommends holding Kraft shares. ÔÇ£We knew there were some headwinds for 2009 but you thought there was enough good to maybe get through it.ÔÇØ  Full-year earnings for 2009 will be $1.88 a share, below the $2 Kraft predicted in October, the company said. Currency effects will lower the earnings by about 16 cents a share this year, and an increase in KraftÔÇÖs pension costs will hurt results by another 8 cents. ┬á Excluding one-time items related to asset impairment, exit and implementation costs, and an adjustment on a gain from its split-off of Post cereals, net income was 43 cents per share. That is a penny short of the 44 cents per share analysts polled by Thomson Reuters, on average, expected.┬á The maker of Velveeta, Oreo cookies and Maxwell House coffee reported net income of $163 million, compared with $585 million a year earlier, and said that sales this year will also be lower than forecast as falling commodity costs force down prices. The adjusted results for the fourth quarter included $170 million in losses from hedges against rising commodity costs, and sales in the period rose 6.2 percent to $10.8 billion, missing analystsÔÇÖ estimates of $11.4 billion.┬á Revenue rose 6 percent to $10.77 billion from $10.14 billion last year. That missed analyst predictions of $11.29 billion as North American volume fell amid markdowns and inventory reduction by retailers, and as the company trimmed less profitable items.┬á The strongest product category was U.S. convenient meals, including DiGiorno and California Pizza Kitchen pizzas, helped by price increases and as consumers continued to eat more from the grocery store rather than restaurants. ┬áThe company expects 2009 revenue to grow about 3 percent excluding acquisitions, from a previous expectation of about 4 percent.