Kraft Foods Inc posted quarterly revenue that fell short of Wall Street expectations, but said its $18.4 billion takeover of British chocolatier Cadbury Plc would accelerate long-term growth.

Kraft reached a deal last month to buy Cadbury and create the world's largest confectioner. Investors are waiting to see how the deal boosts Kraft's growth, especially since top Kraft investor Warren Buffett had opposed the transaction.

There's still plenty of uncertainty in terms of whether Kraft will able to effectively integrate this new business well enough to justify the price they paid, said Edward Jones analyst Matt Arnold.

Kraft expects costs of $1.3 billion through the end of 2012 to integrate Cadbury's operations and would achieve annual pretax savings of at least $675 million in that time frame.

It stood by forecasts for long-term earnings per share growth of 9 percent to 11 percent and organic revenue growth of at least 5 percent for the combined company. Organic revenue excludes currency moves and recent asset purchases and sales.

The largest North American food maker also said the related sale of its frozen pizza business to Nestle would cut 5 cents a share from earnings annually. Some investors had questioned Chief Executive Irene Rosenfeld's rationale in selling a thriving business to fund the Cadbury deal.

That was, we believed, an untouchable asset, ConAgra CEO Gary Rodkin said when asked if he had looked at Kraft's pizza business to grow his own company's frozen food operations.

It was a far higher valuation than we would have given it, Rodkin said of the Nestle purchase.

Rosenfeld defended the move as a difficult, but important strategic decision. She was speaking at the Consumer Analyst Group of New York conference in Boca Raton, Florida.

Kraft shares fell 1.9 percent to $28.55.

LITTLE VISIBILITY INTO 2010

The maker of Oreo cookies and Velveeta cheese said fourth-quarter earnings rose to $710 million, or 48 cents a share, from $178 million, or 12 cents a share, a year earlier, which included costs tied to Kraft's restructuring program.

Analysts on average forecast 45 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 3.2 percent to $11.03 billion, below the $11.07 billion predicted by analysts.

Organic revenue rose 0.4 percent, hit by a 13.7 percent decline in its cheese business as it cut prices to respond to a decline in dairy costs.

Analysts are looking for specific details about future plans from Kraft, but the company kept mum on specific forecasts for 2010 in deference to British takeover rules.

Kraft has gotten acceptances for just over 90 percent of Cadbury's shares as of Monday. It should own all of Cadbury within six to seven weeks, Chief Financial Officer Tim McLevish said during a presentation on Tuesday morning.

Kraft plans to give 2010 earnings guidance and discuss its 2011 outlook when it issues first-quarter results in May, McLevish said.

He said Kraft does not plan to increase its dividend or buy back shares while it works on lowering its debt-to-EBITDA ratio to around 3 times over the next 18 to 24 months.

By region, Kraft's organic revenue fell 2.7 percent in North America and 0.3 percent in Europe in the quarter.

It posted a 10.4 percent rise in developing markets, where it is aiming for additional growth through the Cadbury deal. In India, for example, Cadbury brings in $400 million in 2009 revenue, while Kraft's business there before the deal was not meaningful.

Kraft's top brands overseas included Tang powdered drinks in Latin America, Oreo cookies and Philadelphia cream cheese in the Asia Pacific and Jacobs coffee in the region covering central and eastern Europe, the Middle East and Africa.

(Reporting by Brad Dorfman, additional reporting by Jessica Wohl; Editing by Derek Caney and Gunna Dickson)

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