Heinz to Slash 1,000 Jobs Amid Growth Plan

By Markets FOXBusiness

Ketchup maker HJ Heinz (HNZ) reported on Thursday a 16.4% jump in fourth-quarter profit and said it plans on investing $160 million on growth initiatives this year and cutting up to a thousand jobs.

Continue Reading Below

Heinz's strategic plans to increase manufacturing efficiency and accelerate productivity include exiting five factories in the U.S., Europe and the Pacific, establishing a European supply chain hub in The Netherlands, and cutting 800 to 1,000 jobs.

The company said it will accelerate investment next year in Project Keystone, its ongoing global initiative to improve productivity and make Heinz more competitive by harmonizing global processes. It expects to occur some $40 million in costs during fiscal 2012 from the project.

Excluding one-time productivity initiatives, the company anticipates earnings in the range of $3.24 to $3.32 a share. Wall Street is looking for a slightly higher profit of $3.33 a share. For 2013, though, Heinz forecast earnings of $3.60 to $3.70 a share, ahead of current Wall Street estimates of $3.57 a share.

The Pittsburgh-based maker of various food products, from condiments to pasta meals, posted fourth-quarter net income of $224 million, or 69 cents a share, compared with $192 million, or 60 cents a share, in the same quarter last year. The results narrowly missed average analyst estimates polled by Thomson Reuters of 72 cents.

Revenue for the three months ended April 27 was $2.89 billion, up 6% from $2.7 billion a year ago, narrowly beating the Street’s view of $2.87 billion.

Continue Reading Below

“Heinz delivered record sales, net income and cash flow in fiscal 2011, fueled by accelerating growth in key emerging markets like China, India, Indonesia and Russia and value-enhancing innovation in our core portfolio of iconic brands,” the company’s chief executive, William Johnson, said in a statement.

Sales last quarter were led by a 21% improvement in emerging markets and a 6% jump in its top 15 brands. The quarter marks Heinz’s 24th consecutive of organic sales growth. Slightly lower volumes were offset by a 1.9% improvement in net pricing.

What do you think?

Click the button below to comment on this article.