Kraft Heinz earnings jump to US$899mBusiness | 1 Nov 2019 2:27 pm
Kraft Heinz beat Wall Street’s profit forecasts thanks to the sale of its Canadian natural cheese business for US$1.2 billion.
The company’s net income jumped by 45 percent to US$899 million. Adjusted earnings of 69 US cents per share beat analysts’ forecasts of 53 US cents, according to FactSet.
Kraft Heinz shares jumped by 13.5 percent to US$32.36 on the news. But they are still down by nearly 30 percent since the start of the year.
Third quarter revenue fell by 5 percent to US$6.08 billion — missing analysts’ forecasts — as price increases in the U.S. and Europe failed to make up for lower sales.
Kraft Heinz’s new Chief Executive Miguel Patricio, did not say Thursday whether any other brands will be sold next year. But he said zero-based budgeting is not the problem.
“I see it as a way to do things better every day and to be more efficient and free up more resources to do better in the business,” he said.
Patricio said the company is revamping its research and development team and has named a chief growth officer to help speed product development.
Still, some analysts say the damage to the company’s brands has already been done. In February, Kraft Heinz slashed the value of its Oscar Mayer and Kraft brands by more than US$15 billion.
Then in August, it took a US$474 million impairment charge because of the falling value of six other brands, including Maxwell House, Lunchables, Velveeta and Cool Whip. Its shares fell to an all-time low.-AP