Kraft Foods Group Inc., the North American packaged-foods company with brands including Maxwell House coffee and Velveeta cheese, authorized a $3 billion stock repurchase program.
The buyback plan is Northfield, Illinois-based Kraft Foods’ first since it became an independent company in October 2012. Under the program, which has no expiration date, the timing and amount of stock repurchases will be subject to management evaluation of market conditions and other factors, Kraft Foods said yesterday in a statement.
“We’ve made significant progress in creating a cash-focused, return-oriented company,” Kraft Foods Chief Executive Officer Tony Vernon said in the statement. The “announcement reflects our commitment to disciplined capital management and the desire to balance investments in our businesses to generate profitable growth while at the same time returning capital to shareholders.”
Kraft Foods was created last year when the company formerly known as Kraft Foods Inc. changed its name to Mondelez International Inc., a snack foods purveyor, and spun off its packaged-foods business. In June, Kraft Foods said it would expand to six business units to reduce the complexity of managing a disparate portfolio while also increasing focus on brand-building.
The company also declared a regular quarterly dividend of 52.5 cents a share, payable on Jan. 17 to shareholders of record on Dec. 27.
Kraft Foods said third-quarter net revenue dropped 4.2 percent to $4.4 billion because of comparisons with higher, spin-off related shipments in the year before. The company raised its forecast for full-year earnings per share to $3.58 from $3.4 announced in August. The forecast includes benefit from market-based impact to post-employment benefit plans.
Kraft Foods fell 0.8 percent to $52.44 at the close in New York. The stock has gained 15 percent this year.