Kraft Foods expects lower 4Q revenue

"The fourth quarter was one of real progress and some significant disappointment," Kraft CEO Tony Vernon told investors during a conference call Friday. "We made great strides in productivity, profit, and cash, but we really missed our topline."

But Vernon noted he feels good about the solid financial foundation for the future of the "new Kraft."

Kraft, based in Northfield, Ill., is looking to redefine itself after splitting last year from its global snack foods business called Mondelez International Inc. Mondelez has brands including Oreo and Nabisco. The split was intended to allow each of the companies to focus on a more targeted portfolio of products, thus accelerating growth. As part of Kraft's strategy, it's working to clean up the company's lineup of less-profitable product extensions and revitalize languishing brands like Jell-O by betting on innovations.

Kraft said it anticipates earnings of about 15 cents per share for its fiscal fourth quarter. Analysts surveyed by FactSet expect earnings of 23 cents per share.

Kraft said revenue is expected to drop 10.7 percent to $4.49 billion in the fourth quarter from an adjusted total of $5.03 billion a year ago. Wall Street expected revenue of $4.75 billion.

The company said the decline is due in part to the prior-year period having an extra week of sales. The year-ago quarter also included revenue from products that are now owned by Mondelez as well as product pruning.

But Vernon also noted that sales were also hurt because competitors offered lower prices in certain categories to lure financially strapped mothers. The company said one competitor pushed lower prices of its cold cuts and that hurt sales of the Kraft's Oscar Mayer's Lunchables. Lunchables are box-style lunch combinations like ham and cheddar cheese. In another case, Vernon said Kraft dealt with price competition for its macaroni and cheese products by stepping up its advertising.