Kraft Foods Group (NASDAQ:KRFT) released earnings after Thursday's closing bell. Here's what you need to know about the company's recent announcement.

Gains helped propel earnings
The maker of Oscar Mayer, Capri Sun, and Velveeta served up first-quarter profits of $0.85 per share, including gains tied to market-based impacts to benefit plans and hedging activities. Analysts pegged profits for the maker of Lunchables, Maxwell House, and Jell-O at $0.76 per share this quarter. Kraft booked EPS of $0.76 in the first quarter last year, meaning no change was expected in year-over-year profit growth. Instead, Kraft delivered a 12% increase in EPS.

Miracle Whip maker didn't squeeze out revenue growth
Kraft's revenue fell 3.3% in the first quarter, compared to 2.1% growth during the same quarter last year. The packaged foods powerhouse dished up $4.4 billion in sales for the quarter, down from $4.5 billion for the year-ago quarter. Quarterly sales decreases were mostly due to the timing of Easter-related shipments versus the prior year. Sales declines were also attributed to softness in ready-to-eat Jell-O desserts, cold cuts, and bacon. Meanwhile, cheese and Lunchables aided revenue growth.  

Kraft Foods Group was formed in the October 2012 breakup of Kraft Foods, when it was spun off from the parent company, which then changed its name to Mondelez International. Mondelez retained the parent company's global snack-food brands of cookies, crackers, chocolates, gums, and candies, while Kraft kept the North American grocery portfolio. Mondelez will report earnings next week.

Profitability-boosting efforts are paying off
Since the corporate break-up from Mondelez, Kraft's management has prioritized profit above revenue growth. As a result, Kraft has operated as a more cost-efficient organization, focusing on metrics like free cash flow and return on invested capital. During the first quarter, the mac and cheese maker posted $175 million in free cash flow, up 19% from the year-ago quarter. Kraft posted an impressive $1.5 billion in free cash flow for full-year 2013. However, while this figure reflected improved inventory and payables management, $600 million of it was attributed to the impact of pension plan contributions. 

Foolish takeaway
Despite disappointing quarterly revenue growth, Kraft's management team remains focused on the right metrics. Keep watching in the coming quarters to see if the company's efforts translate into long-term benefits for its shareholders.

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Nicole Seghetti owns shares of Mondelez International. Follow her on Twitter @NicoleSeghetti. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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