(UPDATED 11:32 a.m. ET)
What: Shares of Kraft Foods (NYSE: KFT) popped 5% at the open on news that it would split its snack and grocery business into two publicly traded businesses. The company also reported strong second-quarter results.

So what: CEO Irene Rosenfeld said the breakup reflects a desire to capitalize on two "strong, but distinct, portfolios." Irony? Perhaps. It was only 18 months ago that Kraft acquired Cadbury after a series of offers and counteroffers. Now, it seems, the businesses are (ahem) "distinct."

Either way, Kraft put together a fine performance in Q2. Revenue increased 13.3%, to $13.9 billion, while operating earnings per share rose two pennies to $0.62. Analysts had been calling for $0.58 on $13.15 billion in revenue, according to data compiled by Yahoo! Finance.

Management also raised full-year earnings guidance from $2.20 to $2.25 a share, slightly above Wall Street's consensus estimate.

Now what: Berkshire Hathaway's (NYSE: BRK-A) (NYSE: BRK-B) Warren Buffett is Kraft's second-largest independent investor, holding 5.99% of the company's shares outstanding as of this writing. Buffett confirmed in a TV interview with CNBC's Becky Quick that he's OK with the split, an interesting development since he was originally a critic of the Cadbury acquisition. Rosenfeld apparently went to Buffett yesterday in an attempt to win him over before announcing publicly. Smart move.

Do you agree with the breakup? Disagree? Weigh in using the comments box below and be sure to add Kraft to your watchlist for up-to-date news and analysis on the break-up as it happens.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Berkshire Hathaway at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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