US food giant Heinz has posted an increase in third-quarter profits, driven by sales growth boosted by emerging markets.
In the three months to 25 January, Heinz’s net profit climbed 3.8% to reach US$287.2m, the company reported today (17 February). Operating profit in the period grew 3.6% to $422.4m.
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Sales amounted to $2.92bn, a 7.3% increase on a year earlier. The company said emerging markets were its biggest growth driver in the quarter, delivering organic sales growth of 19.8% and generating over 20% of total company sales.
Emerging markets offset weaker results in North America, where sales volumes fell 2% as Heinz raised prices on frozen potatoes, pasta sauce and ketchup. Sales from Heinz’s North American consumer products segment dropped 1.1% to $830m on a reported basis. Organic sales increased 1.3%.
In Europe, volumes were up 1%, driven by strong performances of ketchup across Europe, soup in the UK, and canned vegetables and Heinz branded sauces in Russia Sales however, dropped 1.1% to $830m on a reported basis. Nevertheless, organic sales increased 1.3%.
“Our strong performance was fuelled by our accelerating growth in emerging markets and our strength in ketchup and sauces, as well as solid growth in our top 15 brands,” said Heinz chairman, president and CEO William Johnson. “Heinz delivered our 27th consecutive quarter of organic sales growth with each of our operating segments contributing.”
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By GlobalDataThe results pushed up shares in Heinz, which narrowed its forecast for full-year earnings.
Heinz said it now expects to deliver 2012 earnings of $3.32-3.34 per share, excluding one-time charges but including a benefit of $0.05 per share from foreign currency exchange rates. On a constant-currency basis, Heinz has forecast annual EPS of $3.27-3.29.
The firm’s previous forecast, which excluded currency fluctuations and charges, was $3.24 to $3.32 per share.
Heinz’s share price climbed 3.93% to $54.15 at 10:00 ET today.
