Heinz's Second Quarter Profit Falls
PITTSBURGH, Pa. (
) --
Heinz
(HNZ)
posted its second quarter earnings today and beat analysts' estimates.
Regardless, Heinz earnings still came in lower than earnings from the same time last year.
The food company, known for its ketchup, condiments and sauces among others, reported second quarter earnings of 73 cents per share on revenue of $2.7 billion. That was a fall from 87 cents per share on revenues of $2.6 billion reported the same time last year.
Analysts polled by Thomson Reuters had expected earnings of 70 cents on revenue of $2.6 billion.
Heinz's earnings fell 16%, but last year's earnings were higher because of one-off gains related to translation hedges on key currencies.
The company's sales growth was driven by its strength in the emerging markets, higher sales of its top 15 brands, and carry-over pricing from fiscal year 2009. Its emerging markets growth was led by pricing and higher sales of nutritional beverages in India and ketchup and baby food in Latin America and Russia.
Globally, infant nutrition led the company's sales growth.
Other growth factors include Heinz's December 2008 acquisition of Golden Circle in Australia, which expanded Heinz's health and wellness platform in beverages. Also, pricing actions taken last year in the company's North America consumer products division helped offset lower volume in its U.S. foodservice business that resulted from lower guest traffic in the restaurant sector.
"Heinz delivered a strong financial performance in an adverse economic climate, led by our growing strength in emerging markets," said Heinz CEO William Johnson. "Looking forward, the company is raising its full-year outlook for earnings and cash flow and we expect increased top-line momentum in the second half of the fiscal year."
Strong first half results, the improving currency climate, and plans to step up its marketing and innovation efforts has led Heinz to raise its full year earnings outlook from continuing operations to $2.72 to $2.82 per share from its previous target of $2.60 to $2.70 per share.
Shares of Heinz are trading up 0.9% at $43.54 in pre-market trading.
Kraft
(KFT)
is down 1.0% at $27.07 a share.
Conagra Foods
(CAG) - Get Report
shares are down 0.35% at $22.48. Another major food peer,
Smithfield Foods
(SFD)
, is down 1.7% to $15.94 per share.
-- Reported by Andrea Tse in New York
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