Kraft Heinz Co. reported strong earnings in the latest quarter after a year-ago loss. But the world’s fifth-largest food producer has also improved its dividend yield.
KRAFT HEINZ CO. (Nasdaq symbol KHC; www.kraftheinzcompany.com) makes condiments and sauces (such as Heinz Ketchup) as well as other packaged foods. These include Velveeta and Philadelphia Cream Cheese, processed meats (such as Oscar Meyer wieners) and beverages (such as Maxwell House coffee).
Kraft Heinz took its current form on July 2, 2015, through the merger of Kraft Foods Group and H.J. Heinz. The combined firm is the fifth-largest food and beverage producer globally.
In the three months ended July 3, 2016, sales fell 4.7%, to $6.8 billion from $7.1 billion a year earlier. If you exclude exchange rates, sales fell just 0.5%. A 1.6% increase in selling prices helped offset a 1.2% decline in overall shipment volumes, mainly meat products and sales to restaurants.
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The company earned $770 million, or $0.63 a share, in the quarter compared to a loss of $344 million, or $0.91, a year earlier.
By eliminating overlapping operations, Kraft Heinz expects to lower its annual expenses by $1.5 billion by 2017. Without restructuring costs and adjusting for currency exchange rates, earnings per share in the quarter rose 39.3%, to $0.85 from $0.61.
Thanks for the analysis. Let’s see how it does going forward with blending its operations and with sales growth. It’s a good sign that the company has been able to raise prices.
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Thanks for the analysis. Let’s see how it does going forward with blending its operations and with sales growth. It’s a good sign that the company has been able to raise prices.
Good article. Wouldn’t buy KHC now, but Buffett and 3G have a good track record squeezing costs and boosting dividends.