Categories Consumer, Earnings

Earnings preview: No surprises expected when Kraft Heinz (KHC) reports Q4 results

It’s been a long time since The Kraft Heinz Company (NASDAQ: KHC) created value for shareholders, who have been patiently waiting for a positive surprise. For the company, 2019 was probably the most challenging year. As the ketchup maker gears up for its next quarterly report, the general sentiment is not very encouraging.

Kraft Heinz (KHC) Q3 2019 earnings results

When the fourth-quarter results are published on Thursday before the opening bell, analysts will be looking for earnings of $0.68 per share, which represents a 19% decline from the year-ago period. Revenues are expected to drop 4.2% annually to $6.6 billion.

Sales Slump

Falling sales and high input costs are the primary headwinds facing the consumer staples company, which had resulted in a hefty noncash impairment charge in 2018. The situation has not changed much since the last report, and it might have a negative impact on the results this time. Meanwhile, the pressure on margins eased in recent quarters, thanks to the company’s aggressive cost-cutting efforts.

Strategic Vision

The stakeholders of the company will be looking for inputs from new CEO Miguel Patricio on his vision for a turnaround. The stock should get a much-needed boost if the management provides an optimistic update with regard to the growth strategy. In the run-up to the earnings announcement, investors will be closely following the stock, considering its relatively low price.

Related: McDonald’s beats Q4 revenue and earnings estimates

The efforts to drive growth through an efficient pricing strategy might help the company retain the current sales momentum to some extent. In the long term, the ongoing innovation and revamped product line should help it get back on track. The increased focus on promotional activities will be helpful.

Also Read:  How Caterpillar (CAT) performed in Q2 2020

Looking Back

All four business segments witnessed weakness in the third quarter, resulting in a 5% fall in revenues to $6.1 billion. At $0.69, adjusted earnings were down 9%. While earnings topped the Street view, sales missed.

Also see: Kraft Heinz Q3 2019 Earnings Call Transcript

Kraft Heinz shares this week hovered near the all-time lows seen in mid-2019. The stock had an unimpressive start to the year and continues to underperform the market. In the past twelve months, it lost about 38%.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

A visual dashboard of GoDaddy (GDDY) Q2 2020 earnings

GoDaddy (NYSE: GDDY) reported a loss of $4.06 per share for the second quarter of 2020 on revenue of $806.4 million. The company also announced its outlook for Q3 and

CenturyLink, Inc. (NYSE: CTL): Q2 earnings highlights

Centurylink (NYSE: CTL) reported second-quarter financial results after the regular trading hours on Wednesday.  Both revenue and EPS for the quarter came in better than the Wall Street projections. CTL

Fastly (FSLY): Q2 2020 earnings key highlights

Fastly (NYSE: FSLY) reported second-quarter financial results after the regular trading hours on Wednesday.  The company reported revenues and net income that were above street expectations. However, FSLY shares fell