UPDATE: Berkshire Hathaway reported record profit — as expected — Friday. Quarterly profit hit $9.43 billion, up from $4.62 billion last year, though operating profit dipped 4%, from $4.72 billion to $4.55 billion.
Dive Brief:
- The Kraft Heinz Co., the third biggest food and beverage manufacturer in North America, posted $6.36 billion in revenue, down 9% from a year ago, which took into account pro forma revenue. This included a 6.7% currency hit and negative 0.3% divestiture impact.
- Profit fell 4.3% to $0.44 per share with the exception of items. This report is the first from the combined company, which officially merged in July. The company gave Q2 sales numbers for the then separate entities in August.
- Warren Buffett and 3G Capital worked together on creating the combined company. Buffett's Berkshire Hathaway is set to post record quarterly profit Friday, helped with a $7 billion pretax gain on the Kraft Heinz stake.
Dive Insight:
Kraft Heinz, like most of the processed foods industry, is hurting with decreased demand as consumers' tastes shift to healthier products, leading to cost-cutting strategies across the industry to boost bottom lines. The company will slash $1.5 billion in yearly expenses by 2017's close.
The company announced Wednesday it would be cutting 2,600 jobs and closing seven factories.
Additionally, Kraft Heinz secured tax breaks Thursday for a new factory in Davenport, IA which will replace an old factory that is a couple miles away. The existing factory currently has 1,200 employees, and city officials said the new plant could have at least 475 full-time positions resulting in a loss of about 700 jobs.
The company will receive tax credits of $1.75 million plus a $3 million forgivable loan.