IE 11 is not supported. For an optimal experience visit our site on another browser.

Profit at Heinz boosted by U.S. business

Ketchup maker H.J. Heinz Co. Thursday said quarterly profit rose on strength in its U.S. business and said it was reviewing its international businesses as it moves to focus on its biggest brands.
/ Source: Reuters

Ketchup maker H.J. Heinz Co. Thursday said quarterly profit rose on strength in its U.S. business and said it was reviewing its international businesses as it moves to focus on its biggest brands.

The company, whose market valuation on a price-earnings basis lags that of many of its competitors, has just completed a three-year plan in which it sold off several U.S. business to focus on ketchup, condiments, sauces and food services.

“We are going to place our focus and resources on our big brands with No. 1 and No. 2 market positions and in four large, developing markets,” William Johnson, chairman and chief executive, said in a news release.

Heinz said it would sell its HAK line of prepared vegetables in Northern Europe and has begun a review of its seafood and frozen businesses in Europe and its Tegel poultry business in New Zealand.

Profit for the fiscal fourth-quarter ended April 27 rose to $206.5 million, or 58 cents a share, from $196.5 million, or 55 cents a share, a year earlier.

Excluding one-time items, earnings were 63 cents a share, a penny better than the average analyst estimate compiled by Reuters Estimate.

Sales rose 5 percent to $2.45 billion. The weak dollar, which boosts the value of overseas sales when they are converted into dollars, accounted for 3.5 percentage points of the increase.

Heinz also forecast fiscal year 2006 earnings of $2.35 to $2.45 a share on a 4 percent to 6 percent sales increases. A higher tax rate and increased interest costs are expected to partially offset higher operating results, the company said.

Analysts on average forecast $2.46, according to Reuters Estimates.