Kraft Foods Inc posted weaker-than-expected quarterly revenue and cut its full-year sales forecast on Tuesday ahead of a deadline to make a formal bid for British chocolatier Cadbury Plc .
The results mark Kraft's fourth consecutive quarterly revenue miss, although it beat analysts' earnings estimates and raised its full-year earnings outlook. Shares in the company fell 3.1 percent in after-hours trade to $26.70.
Kraft initially disclosed a $16.7 billion cash and stock proposal for Cadbury on September 7 and must deliver a formal bid under a UK takeover ruling by Monday.
We remain interested but will maintain a disciplined approach, Chief Executive Irene Rosenfeld said in a statement, outlining measures for pursuing a deal with Cadbury. Our criteria include accretion to cash EPS in the second year, delivering a return on investment well in excess of our cost of capital, and maintaining both our investment grade credit rating and our dividend.
Kraft's revenue fell 5.7 percent to $9.8 billion in the third quarter, due to the stronger dollar and lower pricing, in part because of lower commodity costs. Analysts on average forecast revenue $10.32 billion.
The world's second-largest food company posted third-quarter earnings of $826 million, or 55 cents a share, compared with $1.36 billion, or 91 cents a share, a year earlier. Year earlier results included 57 cents a share in discontinued operations.
Analysts on average forecast 48 cents a share, according to Thomson Reuters I/B/E/S.
Kraft has seen earnings boosted by lower commodity costs even as strength in the dollar has weighed on revenue. Its results were seen as a way of justifying its bid for Cadbury, which has rejected its initial offer.
Kraft is likely to stick by its initial cash and stock proposal to Cadbury shareholders that was disclosed on September 7, sources familiar with the situation told Reuters this week.
(Reporting by Brad Dorfman; Editing Bernard Orr)