Kraft Says Up To Cut More Jobs
Tuesday, February 20th 2007, 10:04 am
News On 6
CHICAGO (AP) _ Shares of Kraft Foods Inc. fell Tuesday as the company's CEO announced a new phase of the company's turnaround plan that she hopes will help the world's second-largest food and beverage maker revive its slumping sales.
In a statement, the company said it will cut costs and try to become more relevant to consumers by reframing its business categories.
The company said it had no new announcement about job cuts. Since the first stage of its turnaround plan was announced, the company has eliminated at least 5,500 jobs. Kraft has about 94,000 employees.
CEO Irene Rosenfeld, who took the helm of Kraft last summer, was to outline the plan Tuesday at a meeting with investors in Scottsdale, Ariz.
``This is a pivotal time in Kraft's history, and while there are things we have to fix, our organization is energized about pursuing a number of trajectory-changing initiatives,'' Rosenfeld said in a statement Tuesday. ``I am confident that our new strategies will return Kraft to predictable and consistent growth.''
The company hopes to increase its revenue by 3 to 4 percent and says it will invest up to $400 million this year in research, marketing and other efforts as part of its plan.
Kraft said the company expects to earn between $1.50 and $1.55 per share during 2007. Excluding a projected 25 cent-per-share restructuring charge, the company will earn between $1.75 and $1.80, short of Wall Street's latest forecasts.
Analysts surveyed by Thomson Financial said they expected the company to earn $1.92 per share in 2007.
Rosenfeld, who said last month that the company's current turnaround effort wasn't yet producing acceptable results, said she hopes the new changes will help Kraft hit its stride by 2009.
Last month, Kraft posted a 19 percent decline in fourth-quarter earnings. Altria Group Inc., whose tobacco operations make the top-selling Marlboro cigarette brand, plans to spin off its majority stake in Kraft in March.
Kraft makes its namesake cheese, Oscar Mayer hot dogs, Maxwell House coffee, Oreo cookies and Jell-O desserts.
Kraft shares fell 70 cents, or 2 percent, to $34.25 in midday trading on the New York Stock Exchange.