Kraft's (NYSE: KFT) third-quarter earnings per share made for good headlines -- the $0.47 in operating earnings per share was a hair better than the $0.46 that Wall Street was looking for. Past that, though, there wasn't a whole lot to leave investors wowed.

The company's top line jumped an impressive-looking 26%, but most of that came from the addition of Cadbury's operations. Excluding Cadbury, Kraft's organic revenue was up 2.5%, 2.3% of which came from price increases. Organic operating income, meanwhile, was held flat as the company stepped up advertising expenses.

What to watch
With a company like Kraft, it's unlikely that investors are going to find something that drastically changes the investment in a single quarterly report, but the third quarter does give investors a few things to keep an eye on. For one, commodity prices need to be watched. The price bumps this quarter weren't for chuckles -- the company is trying to offset rising costs of its own, and the Fed's stimulus measures could exacerbate this issue.

As a brand-driven business, Kraft is in a better position than many when it comes to pricing power. However, it's not the only game in town, and if, say, General Mills (NYSE: GIS) or Kellogg (NYSE: K) decided to bite the bullet on profits in the short run to gain market share, that could be an issue for Kraft. In the third quarter results for North America, we already saw volume affected by higher pricing.

Investors will also want to keep an eye on advertising spending. It sounds nice when the company classifies advertising as "brand-building investments," but it's a cutthroat world out there, and advertising can just as easily be market share defense as an investment that will drive growth. To be sure, the best offense is often a good defense, but if some or all of this is defensive, then investors may have to expect "investments" like these to continue to pressure profits.

Still on track?
Notice I said the issues above were things to watch, not reasons to freak out. Kraft has made no bones about admitting that it was lagging peers like Hershey (NYSE: HSY), Heinz (NYSE: HNZ), and PepsiCo (NYSE: PEP) and it's looking back at the stretch between 2006 and 2010 as "turnaround" years.

With the turnaround now in hindsight, the company is targeting growth. Sure, it may not have looked like it based on this quarter, but 2009 showed that the company has at least some pep left in it. Not only was the 8% bump in operating earnings per share good by Kraft's historical standards, but it put the company back in top half of its peer group. Looking ahead, Kraft will still be shooting for significant gains from emerging markets -- organic revenue in this segment was up 7.4% in the third quarter -- and the addition of Cadbury, which was already in growth mode when Kraft snapped it up.

Frankly, I'm pretty lukewarm on Kraft shares. I'm not sure that one year of positive results is enough proof that the base business is back on track, and shares aren't overly cheap. However, even though Warren Buffett reduced his stake, Berkshire Hathaway (NYSE: BRK-B) is still a big stakeholder, and Pershing Square's Bill Ackman made a case for Kraft being notably undervalued. So obviously folks smarter than me see something there.

Berkshire Hathaway is a Motley Fool Inside Value selection. Berkshire Hathaway is a Motley Fool Stock Advisor pick. HJ Heinz, Kellogg, and PepsiCo are Motley Fool Income Investor picks. Motley Fool Options has recommended a diagonal call position on PepsiCo. The Fool owns shares of Berkshire Hathaway. 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.

Fool contributor Matt Koppenheffer owns shares of Berkshire Hathaway, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.