USA: Heinz Profits Rise 5 Percent In 4Q
The maker of Heinz ketchup, Ore-Ida french fries and StarKist tuna earned $226.4 million, or 63 cents a share, before one-time items in the three months ended May 3, up from $219.4 million, or 60 cents a share, a year earlier.
That matched what analysts surveyed by First Call/Thomson Financial expected.
In trading on the New York Stock Exchange, Heinz shares were up 81.25 cents to $40.438.
Terry Bivens, an analyst with New York-based Bear Stearns Cos., said Heinz is positioned for further growth in Asia, the Pacific region and Europe, where sales increased 16.6 percent.
"They've kind of reinvigorated the European business," Bivens said. "They're taking a lot of cost out of Europe and doing well with convenience meals, the Italian baby food business and some acquisitions."
The latest results excluded charges from a restructuring program in both periods. Including those costs, Heinz earned $97.3 million, or 27 cents a share, in the latest quarter in contrast to a loss of $91.3 million, or 25 cents a share, a year earlier.
Heinz officials say the company's performance was stronger after excluding results from its Weight Watchers classroom business, which was sold in the second quarter. Diluted earnings per share increased 12.5 percent not counting Weight Watchers' performance in the same quarter last year.
Revenue rose 4.9 percent to $2.59 billion from $2.47 billion a year earlier.
For the fiscal year, Heinz earned $890.5 million, or $2.47 a share, up from $474.3 million, or $1.29 a share, a year earlier. Revenue rose to $9.41 billion from $9.30 billion a year earlier.
Separately, Heinz said it plans to invest another $80 million in The Hain Celestial Group Inc., a tea and natural food company from Uniondale, N.Y.
The investment would increase its stake in Hain to 19.5 percent, the same as it was before Hain Food Group bought Celestial Seasonings on May 30.
"We are delighted with our global partnership with Hain Celestial, which is the leading player in the natural and organic segment" of the food industry, said William R. Johnson, Heinz president and chief executive.
Heinz also unveiled its new Starkist branded Tuna in a Pouch, which will debut in September.
Heinz said its vacuum-sealed 7 oz. foil bags will deliver fresher, tastier tuna than tuna in a can. The suggested shelf price is $1.99 for chunk light and $2.79 for albacore.
"I think the Tuna in a Pouch is a good idea because it strikes me there hasn't been much new in the tuna market since the guy first learned how to can the fish," Bivens said.
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