Heinz earnings beat estimates as profit rises on emerging markets, ketchup sales

SHARPSBURG, Pa. — H.J. Heinz said Friday that its fiscal third-quarter earnings rose four percent as the food company reported better-than-expected sales growth in emerging markets and a jump in ketchup sales.

Heinz, whose products range from its namesake ketchup to Ore-Ida frozen potatoes, has struggled with slack North American sales as consumers closely monitor spending. Sales abroad have been stronger, however, helping to ease the drag of higher costs for beans, sweeteners and other commodities.

The company Friday said emerging markets delivered organic sales growth of 19.8 percent during the quarter, generating more than 20 percent of the its total quarterly sales.

Global ketchup sales grew 8.8 percent organically, driven by growth in Latin America and the US foodservice business.

For the quarter ended Jan. 25, Heinz reported a profit of $284.7 million, or 88 cents a share, up from a year-earlier profit of $273.8 million, or 84 cents a share.

Stripping out costs related to factory closures and other efforts, Heinz reported a per-share profit of 95 cents.

Sales rose 7.2 percent to $2.92 billion. On an organic basis, which typically excludes acquisitions, divestitures and currency changes, sales rose 4.6 percent, reflecting a 4.2 percent increase in net pricing and 0.4 percent growth in volume.

Wall Street analysts expected a per-share profit of 85 cents on $2.9 billion in revenue, according to Thomson Reuters.

Gross margin narrowed to 35.1 percent from 37.8 percent.

Shares in Heinz closed Thursday at $52.10 and were inactive before the market open. The stock is down 3.6 percent since the start of the year.