Kraft Heinz continues its focus on cost savings, but also promised innovation and growth ahead for its key brands of Heinz, Kraft and Planters.
The food company said its fourth quarter and 2016 full year results benefited from significant gains from cost savings efforts, as well as boosts from the redemption of preferred stock and lower taxes.
In results released after the stock markets closed Wednesday, the company dually headquartered in Pittsburgh and Chicago reported $944 million in net income attributable to common shareholders, up from $285 million during the same period a year earlier.
On a per share basis, earnings were 77 cents in the three months ended Dec. 31 compared to 23 cents a year earlier.
Adjusted for the impact of one-time items, earnings per share hit 91 cents. That beat analysts expectations, according to the Associated Press, which said analysts polled by Zacks Investment Research were looking for earnings of 87 cents per share.
Kraft Heinz reported net sales of $6.86 billion, almost 4 percent lower than the previous year’s $7.1 billion. The 2015 fourth quarter included an extra week of sales.
The maker of Heinz ketchup, Oscar Mayer wieners and Kraft macaroni and cheese finished the year consistent with the company’s expectations, said CEO Bernardo Hees, in the announcement Wednesday.
“But we need to sharpen our focus on profitable sales, and further improve our capabilities and execution to deliver another year of strong, sustainable growth in 2017,” he said.
The company, which was formed from the 2015 merger of Kraft Foods and the H.J. Heinz Co., said it expects its multi-year integration program to deliver $1.7 billion in cumulative, pre-tax savings by the end of 2017, up from $1.5 billion previously estimated.
Since the merger, the company has worked to integrate the production systems of the two businesses, including expanding some plants and closing others.
Mr. Hees promised innovation coming in several areas in the new year, although he declined to give more details for competitive reasons.
He did say the company with a complicated portfolio of brands has identified Heinz, Kraft and Planters as three key ones, adding that it sees growth opportunities in segments such as condiments and sauces, cheese, meals, nuts and baby food.
Many analysts are waiting to see if the company will move to make another large acquisition in the coming months.
For the full year, Kraft Heinz reported net income attributable to common shareholders of $3.45 billion, or $2.81 per share, vs. a loss of $266 million, or 34 cents a share, a year earlier.
Net sales came in at $26.5 billion.
by Teresa F. Lindeman
