Emerging markets, innovation boost Heinz earnings

by Keith Nunes
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PITTSBURGH — Growth in emerging markets as well as new product innovations supported the H.J. Heinz Co.’s earnings during the third quarter of fiscal 2011, ended Jan. 26. Net income for the quarter was $273,785,000, equal to 85c per share on the common stock. The results were positive compared with the same period during the previous fiscal year when the company earned $228,527,000, or 72c per share.

Sales for the quarter were $2,722,350,000, up from $2,681,702,000 in the same quarter a year ago.

“Heinz delivered strong third-quarter results, reflecting our strategic focus on accelerating growth in emerging markets and driving innovation and marketing behind the leading brands in our portfolio,” said William R. Johnson, chairman, president and chief executive officer. “Overall, Heinz continues to demonstrate that we are one of the most consistent and best-performing companies in the packaged foods industry, with strong businesses and brands, and a winning strategy in a changing world.”

The company said its emerging markets division was the most dynamic growth driver for Heinz, delivering volume growth of 7.2% as the company reported higher sales and volume of Complan and Glucon-D nutritional beverages in India, ABC branded products in Indonesia, Heinz branded products in Russia, particularly Ketchup, and Heinz infant nutrition products in China.

The North American Consumer Products division also posted strong results, according to the company, with 3% sales growth to $839 million and division operating income of $235 million. Notable new product introductions during the quarter included single-serve entrees within the T.G.I. Friday’s line of retail products, Smart Ones value packs, the launch of the Dip & Squeeze food service ketchup line, and new packaging for the Ore-Ida line of products.

For the rest of fiscal 2011, Heinz expects its full-year-reported earnings per share to be in the range of $3.04 to $3.10, up from its previous range of $2.95 to $3.05.

For the first nine months of fiscal 2011, the company posted net income of $779,064,000, or $2.37 per share, up from $672,526,000, or $2.11 per share, in the same period a year ago.

Sales for the first nine months were $7,817,798,000, a slight increase compared with the previous year when sales were $7,770,173,000.
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