Heinz Posts a Sharp Drop in 3Q Profit

Monday, February 28th 2005, 10:31 am

By: News On 6

PITTSBURGH (AP) _ H.J. Heinz Co. on Monday posted a sharp decline in third-quarter profit as higher costs and an impairment charge offset improved sales in its frozen foods and ketchup during the period.

Quarterly income fell to $152.4 million, or 43 cents per share, from $202.2 million, or 57 cents, in the year-ago period. The current quarter includes $73.8 million of non-cash asset impairment charges, primarily related to Heinz's investment in The Hain Celestial Group. Excluding that item, plus income from discontinued operations, adjusted earnings were $212.4 million, or 60 cents per share.

Heinz's results just topped the average estimate of 59 cents per share from analysts polled by Thomson First Call.

Sales totaled $2.26 billion, an increase of 8 percent from $2.1 billion a year earlier and above analysts' view of $2.18 billion.

The company said North American product sales rose 11 percent while revenue from its U.S. foodservice business gained 6 percent. Sales also increased by 7 percent in both Europe and Asia despite lower pricing in those regions.

Looking forward, Heinz said it expects full-year earnings _ excluding items _ to come in near the lower end of its earlier projection of $2.32 to $2.42 per share. Analysts forecast income of $2.33 per share on $8.81 billion in sales.

In fiscal 2004, Heinz earned $2.20 per share and had sales of $8.42 billion.