Categories AlphaGraphs, Analysis, Earnings, LATEST, Retail

Hopes high as Kraft Heinz gets ready for earnings release, after long delay

After leaving the market speculating about its financial performance, by delaying the first-quarter report, packaged food company Kraft Heinz (NASDAQ: KHC) will be releasing results for the first half of 2019 Thursday before the market opens. It will be the first earnings report under the company’s new CEO Miguel Patricio.

Investors will be following the event closely as the management is expected to provide updates on the recent restatement of financial statements, pursuant to an investigation by the Securities and Exchange Commission. The general sentiment has been downbeat ever since the accounting scrutiny exposed massive writedowns on the company’s key brands earlier this year.

Kraft Heinz (KHC) stock tumbles after missing Q4 estimates

Meanwhile, there has been an effort from the management to ramp up the company’s offerings, mainly in the baby food, condiments and meals categories. That, combined with the steps taken to revamp production and investments in go-to-market initiatives, is expected to boost revenues in the to-be-reported period. Also, the top-line growth will be catalyzed by the favorable volume mix in the local market.

Of late, cost escalation has been a major problem facing the American food industry, and Kraft Heinz is no exception. Higher manufacturing and logistics costs might put pressure on margins, dragging down profitability. Currently, analysts expect earnings of $0.61 per share for the March quarter on revenues of $6.06 billion.

Also see: Kraft Heinz stock tumbles after missing Q4 estimates

In short, 2019 has been a difficult year for Kraft Heinz so far. Worse, the setback came at a time when the company faces warnings from market regulators and multiple banks for non-compliance. Also, the food industry as a whole is witnessing heightened competition.

Also Read:  Marathon Oil (MRO) posts wider-than-expected loss in Q1

In May, the company said it postponed the release of first-quarter results after an internal inquiry revealed lapses in its accounting policy. The probe was carried out based on a subpoena sent by the SEC in October last year. The findings led to the restatement of financial results for the last three years.

Related: Kraft Heinz Company Q4 2018 Earnings Call Transcript

Among competitors, General Mills (GIS) recently reported a 7% growth in sales to $4.16 billion for its most recent quarter, which pushed up earnings by 6% to $0.83 per share.

Kraft Heinz’ stock is yet to recover from the massive loss that followed its dismal fourth-quarter performance and disclosure about the SEC investigation. In the last 52 weeks, the shares lost about 29% and plunged 48% since the beginning of the year.

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

Most Popular

Salesforce (CRM) Q1 2021 earning infographic

Salesforce (NYSE: CRM) reported first-quarter earnings results for fiscal 2021 after the regular trading hours on Thursday. The results were better than analysts' projections. Meanwhile, the stock fell over 3%

A visual dashboard of Nordstrom (JWN) Q1 2020 earnings results

Nordstrom (NYSE: JWN) swung to a loss in the first quarter of 2020 hurt by the COVID-19 related charges. The fashion retailer reported a loss of $3.33 per share compared

A visual representation of Ulta Beauty (ULTA) Q1 2020 earnings results

Ulta Beauty Inc. (NASDAQ: ULTA) reported its financial results for the quarter ended May 2, 2020, on Thursday after the market closes. The results missed analysts' expectations. The company slipped

Top