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Heinz squeezes 1Q profit
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September 8, 1999: 2:48 p.m. ET
Ketchup, sauce sales help boost earnings, though results below forecast
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NEW YORK (CNNfn) - H.J. Heinz Co., helped by strong sales of its trademark ketchup and sauce brands, posted higher fiscal first-quarter operating earnings Wednesday -- although the results were a penny a share below expectations.
Operating income for the company's first quarter ended July 28 rose to $236.9 million, or 65 cents a diluted share, from $223.3 million, or 60 cents, a year earlier. Analysts polled by First Call Corp. had expected earnings of 66 cents a share.
Including one-time charges and other costs, Heinz (HNZ) posted earnings of 57 cents a share compared to 58 cents a share in the prior year's first quarter. Among the charges in the latest quarter were $34.6 million to implement the company's "Operation Excel" restructuring program, and an additional $30 million to fix accounting irregularities and put aside funds to cover losses at its Ecuador tuna processing plant.
Besides ketchup and sauce products, improved frozen food and canned tuna sales contributed to the higher first-quarter profits, according to company president William Johnson.
"Excluding restructuring and the other non-recurring items we discussed, I expect to see strong second- half performance with solid double-digit earnings growth from our core businesses," Johnson said.
Heinz said it expects to record a pre-tax gain of about $500 million in its fiscal second quarter ending next month once the sale of its Weight Watchers weight control business closes. The proceeds will be used to retire debt and to fund $29 million in costs related to the launch of its new Boston Market Home Style Meals line.
Heinz shares fell 1/4 to 45-3/16 in early Wednesday trading.
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