Kraft Heinz Posts Q2 Profit - Update

(RTTNews) - Packaged foods and beverage maker Kraft Heinz Co. (KHC), Thursday reported a swing to profit in the second quarter, driven largely by sales.

Kraft Heinz reported second-quarter profit of $770 million or $0.63 per share compared to a loss of $344 million or $0.91 per share last year. Adjusted earnings rose to $0.85 per share from $0.61 per share last year.

Kraft Heinz said sales for the quarter rose to $6.79 billion from $2.62 billion last year. Pro forma sales for the quarter dropped 4.7 percent to $6.79 billion from $7.13 billion last year. Pro forma basis reports consolidates results as if the companies had been merged in both periods.

The Pittsburgh-based food and beverage company 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.

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, healthy, 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.

In the US, which is Kraft Heinz's biggest market, sales were down 1.9 percent to $4.69 billion.

The company plans to cut $1.5 billion in annual expenses by the end of 2017.

"By implementing our integration program and improving our performance in the marketplace, we continued to drive results in the second quarter," said CEO Bernardo Hees. "However, to sustain our momentum, we must remain focused on profitable growth, innovations to meet consumer needs in a challenging environment, and improving our operations."

KHC closed Thursday's trading at $85.54, up $0.64 or 0.75% on the NYSE. The stock further gained $3.56 or 4.16% in the after-hours trade.