Ketchup king H.J. Heinz Co. (HNZ: Quote) reported Friday a higher third-quarter profit, as sales grew about 7 percent driven by emerging markets. The company also narrowed its earnings per share outlook for the fiscal year 2012.
William Johnson, chairman, president and CEO of the company said, "Our strong performance was fueled by our accelerating growth in Emerging Markets and our strength in Ketchup and Sauces, as well as solid growth in our Top 15 brands."
The Pittsburgh, Pennsylvania-based maker of Heinz ketchup, Weight Watchers meals and Ore-Ida french fries, said it delivered its 27th consecutive quarter of organic sales growth, with contributions from each of ts operating segments. Overall, the company's global portfolio delivered organic sales growth of 4.6 percent, reflecting a 4.2 percent increase in net pricing and 0.4 percent growth in volume.
Emerging Markets delivered organic sales growth of 19.8 percent and generated more than 20 percent of the company's total sales. Global Ketchup sales grew 8.8 percent organically and 8.6 percent on a reported basis, driven by growth in Latin America and in U.S. Foodservice. The company's Top 15 brands delivered 10.6 percent rise in sales, with organic sales growth of 5.9 percent.
In the third quarter, net income attributable to the company increased to $284.69 million or $0.88 per share from $273.79 million or $0.84 per share reported last year. Adjusted earnings per share, excluding charges for productivity initiatives, improved 13.1 percent to $0.95 per share.
On average, 15 analysts polled by Thomson Reuters expected earnings per share of $0.86 for the quarter. Analysts' estimates typically exclude one-time items.
Sales for the quarter grew 7.2 percent to $2.92 billion from $2.72 billion in the prior-year quarter, fueled by dynamic growth in Emerging Markets and higher Global Ketchup sales. Analysts estimated revenues of $2.89 billion for the quarter.
Looking ahead to the fiscal year 2012, the company narrowed its earnings per share outlook to the middle of its original range at $3.32 to $3.34 on a reported basis, excluding charges for productivity initiatives. This includes an expected benefit from foreign exchange of nearly $0.05. Seventeen Wall Street analysts project earnings of $3.32 per share for the full year.
The company still sees constant currency growth within its original range of 7 to 8 percent on sales and 6 to 8 percent on earnings per share for the fiscal, excluding special items but including the incremental spending on Project Keystone.
HNZ closed Thursday's regular trading at $52.10 on the NYSE. In the pre-market activity, the shares are up 2.5 percent.
by RTT Staff Writer
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