US food giant Heinz has reported lower first-quarter earnings, but said it was on track to achieve its full-year outlook despite increased commodity costs and a stronger US dollar.

The company posted net income of US$157.3m, or 45 cents per share, for the first quarter to 27 July 2005, compared to $194.8m, or 55 cents per share, in the same period of last year. Results included special items of 7 cents for the quarter, reflecting previously announced reorganisation charges and other costs related to business units being reviewed for potential sale.

Sales rose to $2.11bn for the quarter, compared to $2.00bn a year earlier, led by an 11.3% volume increase in the company’s North American Consumer Products segment. This volume increase was driven by success across all major brands in North America, including Heinz, TGI Friday’s, Poppers, Classico, SmartOnes and Ore-Ida.

“Fiscal 2006 is off to a solid start, in line with our expectations. We drove strong double-digit sales increases in our North American Consumer Products segment and a nearly 10% increase in sales in our Asia Pacific operations. I am also pleased with the recent turnaround in our Italian infant nutrition business,” said Heinz’s chairman, president and CEO, William Johnson.

“We are still tracking to our full-year outlook despite increased commodity cost pressures and a stronger US dollar. We expect operating profit to strengthen through the balance of the year. As previously announced, we are conducting a strategic review of our international portfolio and our global organisation structure. We are making good progress and expect to become an even more focused company providing enhanced shareholder return,” he added.