Kraft Heinz Co. (KHC) - Get Report posted stronger-than-expected third quarter earnings Thursday and said it was making "good progress" in identifying the root causes of its past performance amid a wide-ranging turnaround plan under new CEO Miguel Patricio.
Kraft Heinz said adjusted earnings for the three months ending in September came in a 69 cents per share, down 9.2% from the same period last year but well ahead of the Street consensus forecast of 54 cents per share. Group revenues, Kraft Heinz said, fell 4.38% to $6.1 billion, a figure that was largely in-line with analysts' estimates.
"While our third-quarter results remain below our potential, we showed sequential improvement versus the first half, and I believe we are beginning to operate the business better," said CEO Patricio, who joined the group in April. "We are making good progress in identifying and addressing the root causes of past performance, as well as setting our strategic direction."
"Although there is still much work ahead, we're encouraged by our improving performance, and are even more confident in our ability to turn around the Company and set a path of long term growth and profitability," he added.
Kraft Heinz shares were marked 11.6% higher at the start of trading Thursday following the earnings release to change hands at $31.85 each, a move that would still leave the stock nursing a 26% year-to-date decline.
Kraft Heinz revealed earlier this year that an internal probe found that "several" of its employees in the procurement area of the group had engaged in misconduct linked to the recognition of costs and rebates, leading to the restatement of its financial results for 2016 and 2017, but said that senior management wasn't involved.
Warren Buffett, whose Berkshire Hathaway (BRK.A) - Get Report investment group owns around 26.7% of Kraft Heinz, said he took a $3 billion goodwill writedown on the holding earlier this year, and wasn't able to book anything from the stake in Berkshire's first quarter earnings report owing to the delay in Kraft filing its 10-k with the SEC.
"It's pretty unusual. It means we put in zero for earnings even though we received $130 million in dividends but we don't count that in earnings because it's an equity type of investment, " Buffett told reporters during Berkshire's annual general meeting in Omaha, Nebraska.