Kraft Foods Group (KRFT), a consumer packaged food and beverage company, has announced a 41.86 percent plunge in profit for the quarter ended Jun. 28, 2014, due to sharp increase in costs and expenses.
The company earned $482 million or $0.80 a share in the second-quarter compared with $829 million or $1.38 a share a year ago. Analysts on average had predicted net income of $0.83 a share.
Revenue during the second-quarter went up marginally 0.66 percent to $4,747 million from $4,716 million in the last year period.
Gross margin contracted by 901 basis points over the last year period to 32.04 percent. Total expenses as a percentage of revenues increased to 81.59 percent from 70.36 percent in the same period last year. That has resulted in contraction of 1123 basis points in operating margins to 18.41 percent.
The company reported operating income of $874 million, compared with $1,398 million in the previous year period.
''We continue to execute our playbook and are on track to deliver another solid year of growth in earnings and cash flow,'' said Kraft CEO Tony Vernon.
Cash Position
As on Jun. 28, 2014, the company's cash balance stood at $1,370 million, up 17.70 percent or $206 million from Jun. 29, 2013.
Working Capital
Kraft Foods has witnessed a decline in the working capital over the last one year. The company's working capital stood at $315 million as at Jun. 28, 2014, down $1,222 million or 79.51 percent from $1,537 million on Jun. 29, 2013. It registered a decrease in current ratio to 1.07 as at Jun. 28, 2014 from 1.47 on Jun. 29, 2013.
Debt Position
Kraft Foods has witnessed an increase in the total debt over the last one year. As on Jun. 28, 2014, total debt stood at $10,008 million, up 0.38 percent or $38 million, from Jun. 29, 2013.
The company's total debt was 42.87 percent of total assets as on Jun. 28, 2014, compared with 43.23 percent on Jun. 29, 2013. It has witnessed a decline in debt to equity ratio to 1.83 on Jun. 28, 2014 compared with 2.32 on Jun. 29, 2013.
Shares of the company declined $0.52 or 0.90 percent to settle at $57.24 on Wednesday.
