Kraft is making money by raising prices. Forbes reports, “Kraft said price increases, which were a response to rising commodity costs, accounted for more than 7.0% of the revenue gain.” [Forbes]

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  1. Murph1908 says:

    Before anyone goes off half-cocked…

    Revenue is NOT profit.

    Their revenue may have increased, but so have their expenses.

  2. MissTicklebritches says:

    @Murph1908: Exactly what I was thinking. A company can have billions of dollars in revenues, and still be operating at a LOSS.

  3. Erwos says:

    @Murph1908: Seriously. Talk about bad reporting.

  4. failurate says:

    Very misleading.

  5. JMB says:

    @Murph1908: Agreed.

    What should have been included was the following line, at the bottom of the link:

    Kraft Foods (nyse: KFT – news – people ) earnings rose 3.5%, to $732.0 million, or 48 cents per share, from $707.0 million, or 44 cents per share. Excluding special items, earnings were 58 cents per share, well ahead of the consensus estimate of 50 cents.

  6. failurate says:

    Well, they did increase earnings per share “…earnings rose 3.5%, to $732.0 million, or 48 cents per share, from $707.0 million, or 44 cents per share”.
    And that is profit. So raising prices made them an extra $32 million.

  7. failurate says:

    @failurate: You suck at math.

  8. MitchV says:

    I’d rather Kraft maintain their product consistency and raise prices than use the grocery shrink-ray.

    That being said… the price increase has substantially decreased my Tombstone pizza purchases.

  9. Greasy Thumb Guzik says:

    Kraft is making money because it has laid off thousands of people & shipped as many of its jobs to India as possible.
    All of Kraft’s internal tech support is in India, Pune to be specific & it’s as incompetent as anyone else’s Indian tech support.
    Large numbers of those working at Kraft Court [Glenview] are outside contractors from India who will then go back to India & work for Kraft from there.
    They are also now allowing as many employees as possible to work from home & thus are closing the offices in Bannockburn & consolidating it with the other suburban Chicago buildings in Glenview & Northfield [the HQ, also known as The Big House, for its prison like atmosphere].

  10. The_Gas_Man says:

    Ah, class envy strikes again. Those evil companies and their profits! ;)

  11. aront says:

    @MitchV: I agree, I wish more companies would simply raise prices and be honest with us rather than try and deceive us!

  12. Dervish says:

    They’re not exactly rolling around in a giant pile of money. From the linked article:

    “‘They have to raise prices,’ Ramey said, ‘but Kraft has a history of six or seven years of declining margins and declining units and higher prices.'”

    It’s the same way all across the food industry – or manufacturing industry, for that matter. Costs have been increasing for a few years now.

  13. failurate says:

    @The_Gas_Man: Be careful of your words. One of these days the proleta… I mean the consumers will rise up and take control of the means of production.

  14. The only way I could see this happening is if people are buying MORE food. If they made $.07 profit on a bottle of salad dressing when they sold a million units, if they sell two million units at $.06, then they have made more money. It’s the same way I see gas companies. How much profit do they earn on a gallon of gas. Is it the same as in years before? Yes, they maybe be making more overall, but if they are making the same, or slightly less profit per unit, and we are buying more, is it really their fault they make money?

  15. bglav says:

    Very misleading. Revenue Profit. Their costs are going up as well, which means you need more money to cover higher costs.

  16. atarisuicide says:

    It seems like for every 1 post this site does that is worthwhile, there are about 2 like this that are completely misleading or outright dishonest. I wish there was a “good story” filter for my RSS feed.

  17. The_Gas_Man says:

    @atarisuicide:
    I feel the same way. When there are good stories, they’re really good. But when they’re bad, they’re really bad.

  18. oldheathen says:

    Kraft laid off a friend of mine a couple of years ago – I don’t recall exactly how this happened, but someone (the state or county?) forced Kraft to offer employees whose jobs had been outsourced free retraining in their choice of several different areas. Friend became a paralegal on Kraft’s dime and had the last laugh (I guess), but she had enough inside knowledge of the country-home bacchanals and obscene bonuses Kraft execs lavished upon themselves that it was more than their “cheese food slices” which left a bad taste in her mouth.

  19. TACP says:

    The price of their shredded cheese really has gone up. 10 or 15 years ago, it actually became cheaper than a block of cheese the same size. Not any more; I started shredding my own again. It tastes better, too.

  20. mrearly2 says:

    Kraft–pronounced “Krap.”