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Kraft Foods and NCI Building Systems Inc. Feature in the Zacks Equity Research Blog

Strategic Insights

— 1 min read

The Zacks Equity Research analysts have discussed recent developments in the stock market, with a focus on Kraft Foods Inc. and NCI Building Systems Inc. Kraft Foods has outlined cost-saving strategies to position itself as a strong bidder for the takeover of Cadbury Inc., while NCI Building Systems Inc. has posted third-quarter profit of 25 cents per share, exceeding the Zacks Consensus Estimate. Both companies have implemented cost-reduction programs, resulting in significant savings.

Key Takeaways:

  • Kraft Foods Inc. has outlined several cost-saving strategies, including reducing its supplier base by almost 50% and working with Citigroup and Deutsche Bank on an $8 billion finance program.
  • NCI Building Systems Inc. has posted third-quarter profit of 25 cents per share, exceeding the Zacks Consensus Estimate of 2 cents.
  • The company's cost-reduction programs have resulted in a 17% sequential reduction and a 49.7% year-over-year reduction in cost of goods sold.
  • Quarterly earnings were lower than year-ago net income of $1.63 per share due to lower sales.
  • The company has downsized 43 manufacturing facilities to 32 and is utilizing automation and lean manufacturing tools to reduce costs.
  • Kraft's proposed takeover of Cadbury Inc. would create a company with annual revenues of $50 billion (30 billion), beating Nestle as the world's leading food group.

Statistics:

  • Kraft Foods Inc. has proposed a takeover of Cadbury Inc. for $16.2 billion (10.2 billion).
  • NCI Building Systems Inc. reduced its cost of goods sold by 17% sequentially and 49.7% year-over-year.
  • Quarterly earnings of NCI Building Systems Inc. were significantly lower than year-ago net income of $1.63 per share.
  • Quarterly sales of NCI Building Systems Inc. declined by 50% compared to the comparable period in 2008.
  • The company has implemented cost-reduction programs since November 2008.

Sources:

  • Zacks.com: Analyst Blog on Kraft Foods and NCI Building Systems Inc.
  • Zacks Investment Research, Inc.: About Us
  • Zacks Investment Research, Inc.: Profit from the Pros newsletter
  • Zacks.com: About Zacks
  • Zacks.com: Performance Numbers

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