- Kraft Heinz jumped as much as 11.8% in early Tuesday trading after beating analyst estimates for third-quarter profit.
- The company is in the midst of a turnaround after performance declined in recent quarters. CEO Miguel Patricio joined Kraft in July and is leading the company’s strategy shift.
- “We are not where we believe we can be, but we are excited with the evolution,” Patricio said.
- Watch Kraft Heinz trade live here.
Kraft Heinz soared as much as 11.8% in early Thursday trading after beating analyst estimates for third-quarter earnings.
The company fell below estimates for quarterly revenue. Kraft declined to issue formal guidance for the fourth quarter, instead saying it anticipated performance to fall in line with third-quarter results.
The company is in the midst of a turnaround after recent quarters brought declining performance, multibillion-dollar writedowns, and investor scrutiny. Kraft’s new CEO Miguel Patricio took the reins in July to drive the strategy shift.
“Three months in and we are getting to deeply understand our business. We are not where we believe we can be, but we are excited with the evolution,” Patricio said in an analyst call Thursday.
Here are the key numbers:
Revenue: $US6.08 billion, versus the $US6.13 billion estimate
Adjusted earnings per share: 69 cents, versus the 53 cents estimate
The earnings beat followed price hikes for key products like macaroni and cheese, and Philadelphia cream cheese. Kraft still faces headwinds from consumers leaving legacy food brands for newer, health-focused alternatives.
Kraft stock is trading at its highest levels since early August.
The third-quarter performance follows a slew of negative drivers for the stock. Kraft hit a record low in August after its second-quarter report detailed a $US1.2 billion charge related to a collection of poorly performing businesses. The report also fell below analyst expectations for quarterly sales.
Warren Buffett’s Berkshire Hathaway, which owns a 27% stake in Kraft, told reporters in May that “there’s something going on” with Kraft’s finances and that it was in a dispute with its auditor, PricewaterhouseCoopers.
Kraft stumbled again September 17 after its second-largest holder, 3G Capital, sliced its stake by roughly 9%. The sale involved 25.1 million shares and sent Kraft stock as much as 3.4% lower.
Kraft Heinz traded at $US31.84 per share at 10:30 a.m. ET, down about 26% year-to-date.
The company has three “buy” ratings, 14 “hold” ratings, and five “sell” ratings from analysts, with a consensus price target of $US29.47, according to Bloomberg data.
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