By Nathalie Tadena
H.J. Heinz Co.'s (HNZ) fiscal third-quarter earnings slipped
5.3% as the ketchup maker recorded a larger loss from from
discontinued operations, though organic sales continued to improve
in emerging markets.
The earnings report comes a week after Warren Buffett's
Berkshire Hathaway Inc. (BRKA, BRKB) and private-equity firm 3G
Capital unveiled plans to buy Heinz in a $23 billion deal, one of
the largest acquisitions ever in the food industry. As part of the
deal, shareholders will receive $72.50 in cash for each share. The
deal will take Heinz private as it tries to expand sales in
emerging economies while managing a challenging environment in
developed markets.
Heinz sells 650 million bottles of ketchup in 140 countries
annually and also sells baked beans under its flagship brand and
offers baby food, Tater Tots and soup under a variety of other
brand names.
For the quarter ended Jan. 27, Heinz reported a profit of $269.5
million, or 83 cents a share, down from $284.7 million, or 88 cents
a share, a year earlier. The latest period included a $38.7 million
loss from discontinued operations, compared with a year-earlier
loss of $3.6 million. The latest period also included a special
charge of four cents a share related to an early earnout payment of
$60 million made in connection with its 2010 acquisition of
soy-sauce maker Foodstar. Excluding special items, earnings from
continuing operations rose to 99 cents a share from 96 cents a
share.
Sales improved 2% to $2.93 billion. Organic sales, which exclude
currency fluctuations, acquisitions and divestitures, rose
2.3%.
Analysts polled by Thomson Reuters most recently projected
earnings of 90 cents a share and revenue of $2.99 billion.
Gross margin widened to 37.7% from 36%.
The company said its primary growth driver was emerging markets,
which saw organic sales growth of 18% led by Latin America,
Indonesia and China. Emerging markets represented 23% of total
company sales in the latest period.
Global ketchup sales rose 4.2% on an organic basis, driven by
strong performance in Russia, Latin America and Canada.
Overhead expenses were up 5.2%
Shares closed at $72.19 and were unchanged after hours.
-Write to Nathalie Tadena at nathalie.tadena@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires