Kraft Heinz Posts Q4 Profit - Update

(RTTNews) - Kraft Heinz Co. (KHC), the merged business of packaged foods maker Kraft Foods and ketchup maker H.J. Heinz, Thursday reported a swing to profit in the fourth quarter, driven largely by sales.

Kraft Heinz reported fourth-quarter profit of $285 million or $0.23 per share compared to a loss of $17 million or $0.04 per share last year.

On a pro forma basis, Kraft Heinz's fourth-quarter profit rose to $0.62 per share from $0.56 per share last year. Pro forma basis reports consolidates results as if the companies had been merged in both periods.

Kraft Heinz said sales for the quarter rose to $7.12 billion from $2.80 billion last year. Pro forma sales for the quarter dropped 5 percent to $7.12 billion from $7.50 billion last year.

Kraft Heinz, the third-largest food and beverage maker in North America, is struggling to improve its profitability by lowering costs amidst sluggish sales as more and more consumers now prefer, health, fresh and organic foods to packaged foods. The company is focusing on selling more condiments like ketchup, while at the same time initiating measures to curb costs.

Kraft Heinz CEO Bernardo Hees said, "We are working to implement proven management methodologies, remove inefficient spending and streamline our organization, while investing in our brands and innovation to drive long-term profitable growth. We believe that all of this positions Kraft Heinz for a strong performance in 2016 and beyond."

The company plans to cut $1.5 billion in annual expenses by the end of 2017. Kraft Heinz has announced job cuts of about 5,100 employees, or over 10 percent of its workforce, since the merger closed in July.

The company was created last June through the merger of Kraft Foods and H.J. Heinz, a deal that was engineered by Heinz owners 3G Capital Partners and Berkshire Hathaway Inc.'s Warren Buffett.

This is for the second time that Kraft Heinz has reported earnings for the combined company.

KHC closed Thursday's trading at $74.96, up $1.97 or 2.70%, on the NYSE. The stock further gained $3.04 or 4.06% in the after-hours trade.