Kraft Heinz Co. reported fourth-quarter adjusted profit and revenue that beat expectations in the packaged-foods giant's second earnings report since its merger in July. Shares rose 3.1% to $77.25 in recent after-hours trading. Kraft Heinz, which was formed in July by the combination of H.J. Heinz Co. and Kraft Foods Group Inc., is one of the world's largest food companies, with brands that span supermarket aisles. Like other big packaged-food companies, Kraft Heinz has been struggling as consumers increasingly have been opting for foods perceived as healthier. Many industry executives and investors are watching the progress of company's cost-savings strategy—called zero-base budgeting—to see whether the efforts are benefiting the company's margins. Kraft Heinz is aiming to reduce its annual spending by $1.5 billion by the end of 2017 to boost profit. At the same time, it also is trying to revive brands such as Smart Ones frozen entrees and Kraft boxed macaroni and cheese. For the three-month period ended Jan. 3, Kraft-Heinz reported a profit of $645 million, up from $503 million a year earlier on a basis that consolidates the results as if the companies were combined in both periods. On a per-share basis, which reflects preferred dividends, earnings fell to 23 cents from 26 cents. Excluding one-time items, per-share earnings increased to 62 cents from 56 cents. The company also posted revenue of $7.12 billion, down 5%. Excluding currency impacts and divestitures, organic revenue fell 3.1%. Analysts polled by Thomson Reuters had expected per-share profit of 58 cents and revenue of $7 billion. Gross margin rose to 33.7% from 29.5% The latest period included a benefit of 3 cents a share thanks to an additional week of shipments.
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