Published February 17, 2012
Fueled by strong emerging market sales, ketchup maker H.J. Heinz (HNZ) beat the Street on Friday with a 4% rise in fiscal third-quarter earnings.
The Pittsburgh-based company said it earned $284.7 million, or 88 cents a share, last quarter, compared with a profit of $273.8 million, or 84 cents a share, a year earlier. Excluding one-time items, it earned 95 cents a share, surpassing the 85 cents forecasted by analysts.
Revenue increased 7.2% to $2.92 billion, narrowly beating the Street’s view of $2.9 billion. Gross margins shrank to 35.1% from 37.8%.
Heinz said its organic sales rose 4.6% last quarter, powered by a 19.8% surge in emerging market organic sales. The emerging market strength included strong sales of various products in China, Russia, Latin America, India and Indonesia. Global ketchup organic sales jumped 8.8%, thanks to upbeat results in Latin America.
The company also said its U.S. foodservice sales inched up 1.7% to $360 million, while European sales gained 2.7%. However, growth in its Asia Pacific region soared 8.2% to $632 million.
“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,” CEO William Johnson said in a statement.
Looking ahead, Heinz now sees fiscal 2012 non-GAAP EPS of $3.27 to $3.29, excluding one-time items. Previously, Heinz forecasted EPS of $3.24 to $3.32 previously. Analysts had been calling EPS of $3.32.
Shares of Heinz, which have slumped more than 3% so far this year, rallied 2.98% to $56.65 ahead of the open.