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Organic Consumers Association Kraft Campaign Organic Consumers Association Kraft Campaign KRAFT WEEK OF ACTION FOR SAFE FOOD

In prelude to National Week of Action, Kraft Third - Quarter Earnings Fall

Kraft Third - Quarter Earnings Fall 6.8 Pct

October 15, 2003

Filed at 5:16 p.m. ET

CHICAGO (Reuters) - Kraft Foods Inc. (KFT.N), the largest
North American food company, on Wednesday said
third-quarter profit fell 6.8 percent, dragged lower by
marketing costs and weakness in areas like cookies and
European chocolates, but still beat Wall Street

The maker of Oreo cookies and Oscar Mayer meats also
slightly lowered its expectations for shipment volume
growth from ongoing businesses to about 1.5 percent from
about 2.0 percent. It stuck to its prior earnings forecast
for the year.

Continued softness in Kraft's cookie business and the
impact of a summer heat wave on its European coffee and
chocolate businesses weighed on results, the company said.

``I was very encouraged that they didn't have to lower
their earnings guidance,'' said Keith Patriquin, a vice
president with Loomis Sayles, which owned 1.08 million
Kraft shares through June. ``Sounds like cookies were a
little worse than expected. Cheese is flat, so even with
the higher promotional spending, likely those are the two

He noted that higher spending designed to boost sales in
weak businesses didn't kick in until September, the last
month in the quarter, which had a limited impact on the
full period.

Northfield, Illinois-based Kraft said it earned $810
million, or 47 cents a share, compared with $869 million,
or 50 cents, a year earlier.

Analysts had expected earnings of 46 cents a share on
average in the quarter ended Sept. 30, according to Reuters
Research, a unit of Reuters Plc.

Sales rose 3.7 percent to $7.48 billion, though shipment
volume fell 0.2 percent.

Sales in North America, Kraft's largest market, rose 1.9
percent to $5.33 billion.

Kraft surprised investors in July when it reported
weaker-than-expected profit on slowing shipments of cookies
and other major products and trimmed its full-year earnings

In September, the company stood by its forecast for
earnings of 45 cents to 47 cents a share in the third
quarter and $2.00 to $2.05 for the full year before items.
It repeated that full-year guidance again Wednesday.

Shares of Kraft, which is majority-owned by tobacco maker
Altria Group Inc. (MO.N), closed 14 cents higher at $29.49
on the New York Stock Exchange on Wednesday.

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