Improved outlook seen for food sector profitability

摘要

The outlook for the packaged foods industry has improved to "positive" from "stable," according to an analysis from Moody's Investors Service. Despite little prospective improvement in top-line growth, Moody's said successful efficiency initiatives across the food industry have brightened the industry's outlook. The analysis was published in a Sept. 30 report, "Going positive as cost cutting fuels margin and cash flow growth." Lead author was Brian Weddington, vice-president, senior credit officer. "Although top-line sales growth continues to limp along, more companies are starting to see a bigger pay-off from large-scale cost savings strategies," the ratings agency said. "As such, we now expect core operating income to rise 4.5% to 5.5% from our previous call of 4% to 4.5% for the next 12 to 18 months, excluding Mondelez International, Inc. (Baal stable) and The Kraft Heinz Co. (Baa3 stable). When including these two, our operating income forecast rises significantly, to 8% to 9% growth."