Kraft's profit rises on cost-cutting

Cost cutting has helped Kraft lift its first quarter profit to $US513 million. Source: AAP

KRAFT has reported higher profit for its first quarter as cost-cutting helped offset a decline in revenue.

The company partly attributed the lower revenue to the timing of Easter-related shipments, which were pushed into the second quarter this year instead of the first quarter.

More broadly, the company is facing intensifying competition for a number of its products. It namesake macaroni and cheese, for example, is being challenged by smaller players that position themselves as having higher-quality ingredients.

Kraft Foods Group Inc, based in Northfield, Illinois, split from Mondelez International in late 2012. The idea was to let each company have a more focused group of products; Mondelez took snacks like Oreo and Chips Ahoy that are seen to have bigger potential for growth around the world. Kraft was left with grocery staples that are sold in the saturated North American market.

For the January to March period, Kraft earned $US513 million ($A555.04 million), or 85 US cents per share. Not including one-time items such as a benefit from hedging activities related to its commodity costs, the company earned 78 US cents per share. Wall Street expected 76 US cents per share.

A year ago, it earned $US456 million, or 76 US cents per share.

Revenue fell 3.3 per cent to $US4.36 billion, short of the $US4.47 billion analysts expected, according to FactSet.

In after-hours trading, Kraft shares added 10 US cents to $US56.79.

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