Emerging markets propel Heinz earnings
May 27, 2011
by Keith Nunes
PITTSBURGH — Emerging markets such as China, India, Indonesia and Russia continue to propel the earnings for the H.J. Heinz Co. During the fiscal year ended April 27, the company’s net income rose to $989,510,000, equal to $3.09 per share on the common stock, up 14% from net income of $864,892,000, or $2.87 per share, in fiscal 2010.
Sales for the year were $10,706,588,000, up 2% from fiscal 2010.
The company said emerging markets contributed 16% of the company’s total sales during fiscal 2011. Contributing to the growth were products such as Heinz baby food in China, Complan and Glucon-D nutrition beverages in India, ABC soy and chili sauces in Indonesia, and Heinz ketchup and baby food in Russia.
Sales from Heinz’s North American Consumer Products segment grew 2% to $3.27 billion during the year. New product introductions and trade promotions helped drive Heinz Ketchup and gravy, Smart Ones frozen entrees, Classico pasta sauces, Ore-Ida frozen potatoes and T.G.I. Friday’s frozen meals and appetizers. Operating income rose 8% during the year to $833 million.
Looking ahead to fiscal 2012, the company announced plans to invest $160 million to increase manufacturing efficiency. The plan includes the closing of five facilities, including two in Europe, two in the United States and one in the Pacific region. Heinz also will create a supply chain hub in The Netherlands that will consolidate and lead procurement, manufacturing, logistics and inventory control.
Excluding the costs of the one-time productivity initiatives, Heinz expects its fiscal 2012 earnings per share to be in the range of $3.24 to $3.32.
During the fourth quarter of fiscal 2011, Heinz recorded net income of $222,863,000, or 70c per share on the common stock, up 16% from $192,366,000, or 61c per share, in the same period a year ago.