Kraft Foods Group has reported a 10.80 percent fall in profit for the quarter ended Sep. 27, 2014. The company has earned $446 million, or $0.74 a share in the quarter, compared with $500 million, or $0.83 a share for the same period last year.
Revenue during the quarter went up marginally by 0.14 percent to $4,400 million from $4,394 million in the previous year period. Gross margin for the quarter contracted 446 basis points over the previous year period to 29.36 percent. Total expenses were 83.50 percent of quarterly revenues, up from 80.20 percent for the same period last year. That has resulted in a contraction of 330 basis points in operating margin to 16.50 percent.
Operating income for the quarter was $726 million, compared with $870 million in the previous year period.
Cash Flow
Kraft Foods Group has generated cash of $880 million from operating activities during the nine month period, down 21.36 percent or $239 million, when compared with the last year period.
The company has spent $326 million cash to meet investing activities during the nine month period as against cash outgo of $266 million in the last year period. It has incurred net capital expenditure of $324 million on net basis during the nine month period, up 21.80 percent or $58 million from year ago period.
The company has spent $1,300 million cash to carry out financing activities during the nine month period as against cash outgo of $870 million in the last year period. It has spent net of $380 million on repurchase of common stocks.
Cash and cash equivalents stood at $935 million as on Sep. 27, 2014, down 24.05 percent or $296 million from $1,231 million on Sep. 28, 2013.
Working Capital
Kraft Foods Group has witnessed a decline in the working capital over the last year. It stood at $331 million as at Sep. 27, 2014, down 82.90 percent or $1,605 million from $1,936 million on Sep. 28, 2013. Current ratio was at 1.08 as on Sep. 27, 2014, down from 1.67 on Sep. 28, 2013.
Cash conversion cycle (CCC) has decreased to 37 days for the quarter from 38 days for the last year period. Days sales outstanding were almost stable at 23 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 60 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 46 days for the quarter, when compared with the previous year period.
Debt Level
Kraft Foods Group has witnessed an increase in total debt over the last one year. It stood at $10,019 million as on Sep. 27, 2014, up 0.40 percent or $40 million from $9,979 million on Sep. 28, 2013.
Total debt was 43.94 percent of total assets as on Sep. 27, 2014, compared with 43.15 percent on Sep. 28, 2013. Debt to equity ratio was at 1.79 as on Sep. 27, 2014, down from 2.06 as on Sep. 28, 2013.
