H. J. Heinz Company Earnings: Profit Increase Breaks Streak of Falling Profits

S&P 500 (NYSE:SPY) component H. J. Heinz Company (NYSE:HNZ) reported net income above Wall Street’s expectations for the third quarter. HJ Heinz manufactures food products, including ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition and other food products.

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

H. J. Heinz Company Earnings Cheat Sheet for the Third Quarter

Results: Net income for the food company rose to $284.7 million (88 cents per share) vs. $273.8 million (84 cents per share) in the same quarter a year earlier. This marks a rise of 4% from the year earlier quarter.

Revenue: Rose 7.2% to $2.92 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: H. J. Heinz Company reported adjusted net income of 95 cents per share. By that measure, the company beat the mean estimate of 85 cents per share. Analysts were expecting revenue of $2.89 billion.

Quoting Management: Heinz Chairman, President and CEO William R. Johnson said: “Heinz delivered sales growth of more than 7% and higher EPS in the third quarter while continuing to invest in marketing, new capabilities and productivity initiatives that will make the Company even more competitive in a rapidly changing world. 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. Heinz delivered our 27th consecutive quarter of organic sales growth with each of our operating segments contributing.”

Key Stats:

Gross margin shrank 2.1 percentage points to 35.7%. The contraction appeared to be driven by increased costs, which rose 10.8% from the year earlier quarter while revenue rose 7.2%.

Revenue has risen the past four quarters. Revenue increased 8.3% to $2.83 billion in the second quarter. The figure rose 14.9% in the first quarter from the year earlier and climbed 6% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now topped analyst estimates for the last three quarters. It beat the mark by one cent in the second quarter and by 2 cents in the first quarter.

Last quarter’s profit increase breaks a streak of two consecutive quarters of year-over-year profit decreases. In the second quarter, net income fell 5.7% while the figure dropped in the first quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is 87 cents per share, up from 84 cents ninety days ago. The average estimate for the fiscal year is $3.32 per share, down from $3.33 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Stories:

Why Are Gas Prices Climbing?

Organic Farming: The New Frontier

Will Gold Cleanse The World From Dirty Fiat Currencies?

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com