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Heinz to cut 1,900 jobs
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March 15, 2001: 12:20 p.m. ET
Foodmaker to cut jobs primarily in tuna, pet food operations; profit is flat
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NEW YORK (CNNfn) - Foodmaker H.J. Heinz Co. reported quarterly earnings that matched Wall Street's lowered forecasts Thursday, and said it plans to cut 1,900 jobs in a reorganization meant to boost profitability.
The Pittsburgh-based maker of Heinz Ketchup, StarKist Tuna, Ore-Ida potatoes and 9-Lives cat food said most of the job cuts would come from its tuna and pet food operations. That will help it save about $25 million next year and $60 million each year starting in 2004.
"Our goal is to make all of our global businesses as competitive as possible as Heinz aims to achieve stronger sales and profit growth," CEO William Johnson said in a statement.
 Heinz reported earnings of $227.4 million, or 65 cents a share, excluding one-time items, for its fiscal third quarter ended Jan. 31, little changed from $227.3 million, or 63 cents a share, a year earlier. The results matched lowered forecasts, according to First Call, which tracks analysts' estimates.
Third-quarter sales fell slightly to $2.27 billion from $2.29 billion.
Heinz warned March 5 that weak tuna sales and higher energy costs would cause it to miss third-quarter earnings. That softness is what prompted Thursday actions. The company said it would shut down all tuna operations in Puerto Rico and divest its fishing fleet of eight boats and related equipment. Tuna production will be absorbed into existing facilities. Heinz also will also cease canned pet food operations at its Terminal Island, Calif., facility, which will switch to fish-processing, labeling for StarKist, distribution and research and development functions, employing about 200.
Heinz said it would incur a $300 million pre-tax charge in the fourth quarter from the reorganization.
Ketchup consumption increased during the quarter, Heinz said, thanks to the new EZ Squirt green and red ketchup and Super Bowl merchandising. U.S. foodservice sales increased 12 percent year-to-date. Ketchup, condiments and sauces sales grew 9.2 percent, with sales of the company's new EZ Squirt green and red ketchup up 21 percent.
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Excluding tuna and pet food, the company's North American businesses posted a 7.6 percent increase in operating income, Heinz said.
Asia-Pacific sales declined 10.6 percent mainly because of negative currency transactions and reduced sales in Australia, New Zealand and Japan.
Indonesia was the company's one bright spot overseas, with sales topping $100 million.
Third-quarter North American frozen food sales increased 13 percent to $256.5 million on the strength of Bagel Bites snacks, Smart Ones frozen entrees, and Boston Market HomeStyle Meals.
Shares of Heinz (HNZ: Research, Estimates) fell 11 cents to $40.75 in Thursday morning trading. 
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