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Heinz 2Q beats Street
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December 8, 1998: 12:06 p.m. ET
Ketchup company pulls past estimate, but exchange rates weigh down sales
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NEW YORK (CNNfn) - H. J. Heinz Co. reported better-than-expected second-quarter earnings Tuesday, but said results would have been stronger were it not for the effects of unfavorable exchange rates.
Heinz, a leading food processor, posted net income for the quarter ended Oct. 28 of $231.3 million, or 63 cents per diluted share, on revenue of $2.32 billion. In the year-ago quarter, the company earned $189 million, or 51 cents per share, on sales of $2.26 billion.
Excluding a number of special items, the company earned 60 cents per share, up from 54 cents per share last year. Analysts expected the company to earn 59 cents a share, according to First Call consensus estimates.
Operating income during the quarter also grew to $437.4 million, from $356 million last year. Had exchange rates remained constant with last year's second quarter, however, Heinz said its operating income would have been up 12 percent at $420.2 million.
Currency-exchange rates also weighed down sales by 3.3 percent, it said.
Heinz said its strong quarterly results reflect growth in its ketchup, Weight Watchers, soups and seafood product lines.
"This was an excellent quarter for Heinz, with 11.1 percent earnings per share growth and volume growth of 3.2 percent, favorable pricing increased sales by 1.2 percent and acquisitions increased sales by 2.3 percent," said Heinz President and Chief Executive William R. Johnson. "We are disappointed by, and are addressing, the market shares in frozen potatoes and pet food to increase growth and strengthen brand equity."
The recent initiative to consolidate Ore-Ida and Weight Watchers Gourmet foods into Heinz Frozen Food was designed to do just that, he said.
Johnson also noted the company is on track to meets its goal of 10 percent to 12 percent earnings per share growth for the fiscal year.
For the six month period, Heinz posted net income of $445 million, or $1.21 per share, up from $432 million, or $1.16 per share, last year.
Heinz, which markets Heinz, StarKist, 9-Lives, Kibbles 'n Bits, and Weight Watchers brands, among others, has sales of about $10 billion.
Shares of Heinz (HNZ) were up 1-3/16 Tuesday afternoon at 58-1/16 on the New York Stock Exchange. 
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