H. J. Heinz Earnings: Margins and Costs Squeeze

S&P 500 (NYSE:SPY) component H. J. Heinz Company (NYSE:HNZ) reported its results for the fourth quarter. HJ Heinz manufactures food products, including ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition and other food products.

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H. J. Heinz Company Earnings Cheat Sheet

Results: Net income for H. J. Heinz Company fell to $177.6 million (55 cents per share) vs. $223.9 million (70 cents per share) a year earlier. This is a decline of 20.7% from the year-earlier quarter.

Revenue: Rose 5.6% to $3.05 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: H. J. Heinz Company reported adjusted net income of 81 cents per share. By that measure, the company beat the mean estimate of 79 cents per share. Analysts were expecting revenue of $3.07 billion.

Quoting Management: Heinz Chairman, President and CEO William R. Johnson said: “Heinz delivered strong fourth-quarter results led by our trio of growth engines – Emerging Markets, Global Ketchup and our Top 15 Brands. Excluding special charges, Heinz grew earnings per share by more than 17% and we delivered our 28th consecutive quarter of organic sales growth, supported by increased investments in marketing, productivity and Emerging Markets capabilities.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 10 cents in the third quarter, by one cent in the second quarter, and by 2 cents in the first quarter.

Revenue has risen for the last four quarters. Revenue increased 7.2% to $2.92 billion in the third quarter. The figure rose 8.3% in the second quarter from the year earlier and climbed 14.9% in the first quarter from the year-ago quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 83 cents a share to 82 cents over the last thirty days. For the fiscal year, the average estimate has moved down from $3.34 a share to $3.33 over the last thirty days.

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

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