posted a rise in second-quarter earnings Thursday, citing increased sales due in part to favorable pricing in Europe.
The Pittsburgh-based company said net income for its most recent quarter came in at $212.1 million, or 60 cents a share, up from $208.2 million, or 59 cents a share, in the year-ago quarter. Excluding special items, Heinz posted a net profit of $219 million, or 62 cents a share, topping analysts' expectations by 4 cents. Total revenue for the quarter rose 6.4% to $2.6 billion.
Sales at its European operations rose 4.4% in the second quarter, benefiting from favorable exchange rates and higher prices of seafood, beans and soup. Frozen-food sales rose 5.7%, reflecting the continued strength of recent acquisitions such as T.G.I. Friday's, Poppers and Delimex. Sales at Heinz North America increased a more modest 1.8%, primarily because of the acquisition of Dianne's Gourmet Desserts.
In addition, the company said it plans to issue a special stock dividend in the form of Heinz's stake in SKF Foods, contingent upon the closing of the Del Monte deal. The dividend for common stockholders will be payable Jan. 10, 2003, to shareholders at the close of business Dec. 23, 2002. Preferred stock dividends will be doled out on Jan. 1, 2003.
Back in June, Heinz said it would spin off some of its businesses, including 9-Lives, StarKist and Nature's Goodness, and merge them with
. Under the terms of the deal, Del Monte would assume more than $1 billion of Heinz debt and the new merged business will operate under the Del Monte name. Heinz shareholders can anticipate a one-third cut in their annual dividend, to $1.08 a share, beginning April 2003 to reflect the smaller company.
"Our second-quarter results show progress in earnings and cash flow, as well as some improvement in volume," said William R. Johnson, the company's chairman, chief executive and president, in a prepared statement. The company remains comfortable with its current 2003 earnings outlook of $2.50 to $2.65 prespin, or $2 to $2.05 postspin. "Going forward, Heinz will focus on faster growth, consistent earnings and improved cash flow," Johnson said.
The shares were up 86 cents, or 2.5%, at $34.91 at midday on the
New York Stock Exchange.