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Giant food maker Kraft (KFT) has reported better-than-expected results for the first quarter. Indeed, for the March interim, the company posted share net of $0.49 (excluding a positive $0.67 in acquisition-related items), nicely ahead of our $0.44 estimate and the year-earlier tally of $0.45. The upside was attributable to strong ongoing sales from both the existing operations and the newly acquired Cadbury properties. Overall, revenue increased over 25% from 2009, to $11.32 billion. Excluding the Cadbury contributions, it was up nearly 4% in the term. Additionally, Kraft benefited from an enhanced pricing strategy that is offsetting commodity cost headwinds, which helped support the gross margin improvement.

Despite this good performance, we are maintaining our share-earnings calls for 2010 and 2011 at $2.05 and $2.30, respectively, until we have more visibility into Cadbury-related synergies and the fallout from the European debt crisis.