Kraft and Philip Morris have both seen a rise in Q3 net income. Kraft is thriving as a public company, with Q3 revenues up 29.6% and a rising share price.

Meanwhile, despite Phillip Morris, majority shareholder also posting positive results (partly driven by Kraft's performance), its share price is suffering. In particular, the company needs to address concerns over its troubled beer subsidiary Miller.

Kraft Foods has announced Q3 earnings of US$522m, on revenue of $8.06bn. The company cited strong sales in central and Eastern Europe along with sales of Oscar Mayer meats and frozen pizza in the US as key drivers of its growth.

Total revenues increased 29.6% and worldwide volume, a closely watched indicator of the company's underlying business, rose 3%. North American volume increased 2.5%, while overseas volume climbed by 4.4%. The integration of Nabisco is said to be proceeding well and through it, Kraft still expects to save $100m this year.

Analysts, however, were rather more cautious of the results. Unfavorable foreign currency transactions are expected to pose future problems and while Kraft has seen some currency issues related to the weak euro improve, foreign exchange swaps could still hurt earnings by between US$70m and US$100m this year.

Philip Morris spun off Kraft Foods last year but remains the majority shareholder. The shares went public at US$31.50 and the day after Tuesday's Q3 announcement, Kraft traded up US$0.40 at US$34.00. In contrast, even though Philip Morris announced Q3 underlying net earnings growth of 5.3% to US$2.4bn on Wednesday, its shares fell US$0.68 to close at US$50.01 that same day. Wall Street clearly feels that Philip Morris cannot rely on Kraft's strength alone, and must continue to grow.

Perhaps one way to do this would be to address problems in its Miller Brewing Company subsidiary. Miller reported an operating profit of US$131m , down 7.7% from Q3 last year. Apart from higher advertising costs for Miller's core brands, declining sales of Miller's non-core brands, such as Milwaukee's Best, contributed to the poor financial performance.

Whether it can turn this performance around now that the peak beer season is over remains to be seen. Indeed, some believe that Philip Morris might do well to sell off the business. If so, the UK's Scottish & Newcastle, with existing strong ties to Miller, could be a good suitor.

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