Kraft Heinz Co. (KHC, Financial) reported its first quarter of combined revenue and earnings on Thursday, Nov. 5. For the third quarter of 2015, Kraft Heinz reported revenue of $6.36 billion and EPS of 44 cents. On a pro forma comparison, the company showed a revenue decrease of 9% from the comparable quarter and an EPS decrease of 4.3%.
With international operations accounting for 29% of total sales, the company was significantly impacted by currency effects, which had a negative influence of 6.7% on revenue. International currency effects further dampened already lower sales across all of the firm’s geographic segments. As illustrated below, in the U.S. total sales were down 3.7% from the comparable quarter, while international sales were down 20%.
Despite the quarter’s results, the combination of Kraft and Heinz appears to be showing numerous synergies. Specifically within the brand portfolio, the firm now boasts eight $1 billion brands including such names as Kraft, Heinz, Capri Sun, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer and Velveeta.
Overall, even with the quarter’s revenue decline, the stock has traded fairly consistently in the open market down 1.3% since its open on July 6. Currently priced at $72.01, the stock is attractive to investors. Warren Buffet is a leading guru shareholder, owning 26.85% of the outstanding shares.
The ownership position in Kraft Heinz substantially helped Berkshire Hathaway (BRK.A, BRK.B) in the third quarter. On Friday, Nov. 6, Berkshire Hathaway reported a comparable quarter net income gain of 104%, significantly aided by a gain of $4.4 billion from its investment in Kraft Heinz.
Disclosure: I do not have any positions in any stocks mentioned in this article.
