Kraft Foods Inc., Northfield, Ill., reported strong fourth quarter and full year 2011 results, driven by revenue growth, effective cost management and focused investments in the company’s iconic brands, the company said. However, the company’s net revenues for U.S. beverages were $725 million in the fourth quarter, down 3.2 percent. For the full year, U.S. beverages net revenue was $3 billion, a 6.4 percent decrease.

The company’s overall net revenues for the fourth quarter were $14.7 billion, up 6.6 percent; organic net revenues increased 6.1 percent. For the full year, Kraft Foods’ net revenues were up 10.5 percent to $54.4 billion. Organic net revenues grew 6.6 percent, driven by strong growth across all geographies. Pricing contributed 6 percentage points of growth, and volume/mix contributed 0.6 percentage points.  

“We delivered terrific results in 2011, and our businesses are healthier than ever due to the disciplined execution of our strategy,” said Irene Rosenfeld, chairman and chief executive officer of Kraft Foods, in a statement. “We expect to deliver top-tier growth in 2012, in line with our long-term targets, while we prepare to successfully launch the North American grocery and global snacks companies later this year.”

Operating income for the fourth quarter was $1.5 billion, and the operating income margin was 10.3 percent. Underlying operating income, which excludes acquisition-related costs, integration program costs, and spin-off-related costs, grew 7.4 percent to $1.7 billion.

Operating income for the full year was $6.7 billion, and the operating income margin was 12.2 percent. Underlying operating income grew 9.7 percent to $7.2 billion, driven primarily by effective management of input costs through pricing and productivity, favorable foreign currency and volume/mix gains, the company says. These gains were partially offset by the year-over-year change of unrealized gains or losses from hedging activities and the loss of the Starbucks consumer packaged goods (CPG) business. The underlying operating income margin of 13.3 percent was essentially flat versus the prior year despite the impact of a higher revenue base from pricing on the margin calculation, the company says.

Segment operating income for Kraft Foods North America increased 12.7 percent for the fourth quarter; however, the U.S. Beverages segment was down 39.8 percent in that time period. For the full year, segment operating income for Kraft Foods North America grew 3.6 percent, including a negative 3.4 percentage point impact from divestitures ― primarily the Starbucks CPG business, the company reports. The U.S. Beverages segment decreased 20.2 percent on the year.

In 2012, Kraft Foods expects to deliver organic net revenue growth of approximately 5 percent, including a negative impact of as much as 1 percentage point from product pruning in North America. Operating earnings per share is expected to grow at least 9 percent on a constant currency basis, despite a higher effective tax rate and a 4 percentage point headwind from higher pension costs, the company says.  

“Our business momentum remains strong,” said David Brearton, the company’s executive vice president and chief financial officer, in a statement. “We're confident that we can continue to deliver top-tier growth while we position ourselves to launch two industry-leading companies by the end of the year.”

The company also said that it will incur one-time restructuring, transition and transaction costs of between $1.6 billion to $1.8 billion as it prepares to separate into two companies later this year. In addition, the company estimates that it could incur between $400 million and $800 million of potential debt breakage and financing fees as it executes a migration of debt to the North American grocery company.