Kraft shares fall 2.4 pct on outlook, Starbucks spat

Kraft Foods Inc (KFT.N) shares fell 2.4 percent on Friday, a day after the packaged foods company said its 2011 forecast included an extra week.

The maker of Maxwell House coffee, Cadbury chocolate and Velveeta cheese also said that Starbucks (SBUX.O) wants to end the companies' 12-year-old deal whereby Kraft sells packaged Starbucks coffee. [ID:nSGE6A30OF]

RBC Capital Markets analyst Edward Aaron said losing this $500 million business could shave off 1 percent from Kraft's revenue and 2 cents to 4 cents per share in earnings. He also said the loss could influence Kraft's strategy moving forward.

"We can't help but wonder whether this change could motivate Kraft to eventually divest Maxwell House," Aaron said in a research note.

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- Posted: 2010-11-05 10:20:03

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