Kraft Foods sees Cadbury acquisition bolstering snacks unit, anticipates higher sales, profits

Kraft Foods sees earnings growth over next 3 years

NEW YORK — Kraft Foods Inc. predicted Wednesday that its earnings per share will grow 9 percent to 11 percent over the next three years and developing markets will becoming a larger part of its business.

The nation’s biggest food maker, known for brands including Nabisco, Maxwell House and its namesake, also said that organic revenue — generally a measure involving existing rather than newly-acquired businesses — should climb 5 percent or more by 2013. Kraft, based in Northfield, Ill., forecasts 2010 organic revenue growth of 3 percent to 4 percent.

The company, ahead of a meeting Wednesday with analysts and investors in New York, said its snack business has been significantly helped by its Cadbury PLC acquisition. The unit, which also includes Oreos and Trident gum, now makes up more than half its total revenue.

Kraft, which purchased the British confectioner in February for $19.5 billion, said the acquisition should help deliver $1 billion in incremental revenue synergies and $750 million in cost savings by 2013.

Last month the company said it expects to spend more integrating Cadbury’s operations, some $1.5 billion, up from an earlier estimate of $1.3 billion.

The food maker sees business in developing markets comprising about one-third of total revenue by 2013, up from a quarter, as demand grows in countries such as Brazil, India, Mexico and China.

Kraft’s consumer product sales have fallen in developed markets like North America because shoppers are skimping on name brands to save money in the weak economy.

Kraft said it will continue to spend money on marketing bigger regional brands such as Oscar Mayer meats, Jacobs coffee and Tang powdered drinks. It will also try to grow local brands include A-1 steak sauce in North America, Dairylea cheese in the U.K. and Vegemite spreads in Australia.