"I see another rich widow"
Posted on 02/28/2006 11:08:01 AM PST by new yorker 77
Ketchup maker H.J. Heinz Co. (NYSE:HNZ - news) on Tuesday posted a 23 percent drop in net profit, and fell short of Wall Street estimates, as its tax rate rose and the stronger dollar cut into the value of overseas sales.
Analysts said part of the earnings miss was because some operations that were reclassified by the company as discontinued had been classified as ongoing operations by analysts when they made their estimates.
"At least part of the apparent miss was due to the sale of businesses in Europe, as Heinz streamlines its operations there -- a plan that we like," Edgar Roesch, analyst at Bank of America Equity Research, said in a research note. He rates Heinz shares "buy."
The company is in the process of selling parts of its European business in order to improve profitability in that region. It saw sales volume declines in its Italian baby food business and frozen food business in Britain.
Heinz shares rose 5 cents to $37.65 in morning trade on the New York Stock Exchange, after falling as much as 2.6 percent earlier.
Net profit fell to $116.6 million, or 35 cents a share, for the fiscal third quarter ended January 25, from $152.4 million, or 43 cents a share, a year earlier.
Excluding one-time items, earnings from continuing operations were 50 cents a share, the company said. Analysts on average forecast earnings 56 cents a share, according to Reuters Estimates.
Sales rose 5.7 percent to $2.19 billion, driven mainly by acquisitions. Excluding the impact of foreign exchange rates, sales were up 9.4 percent. Analysts on average had forecast sales of $2.37 billion.
Based on volume, which factors out currency and price fluctuations, sales rose 2.9 percent, driven by the North American consumer products business and the Australian and UK businesses.
The company's European seafood business, which Heinz agreed last week to sell to Lehman Brothers Merchant Banking for 425 million euros, and the Tegel poultry business, which Heinz has also agreed to sell, were both included as discontinued operations.
The company said it is still looking to sell other businesses and is looking for ways to maximize shareholder value in its European frozen foods business.
Heinz's effective tax rate in the quarter rose to 35.5 percent, compared with 22.3 percent in the year-earlier quarter. Heinz said it continue to expect an effective tax rate for the fiscal year of 30 percent to 31 percent.
Heinz stood by its forecast for a 6 percent to 8 percent increase in fiscal 2007 earnings from pro forma 2006 earnings of $2.10 to $2.16, with sales up 3 percent to 4 percent.
Heading into Tuesday, Heinz shares traded at about 16 times estimated 2006 earnings, compared with a multiple of 17 for the Dow Jones U.S. Food Producers Index. (^DJUSFO - news).
The stock rallied 10 percent between February 6 and February 23, boosted by talk that billionaire investor Nelson Peltz could challenge the company's management in a proxy fight.
The deadline for filing a proxy motion is Saturday, Heinz Chairman and Chief Executive William Johnson said. He declined to say if he had spoken directly with Peltz.
"We're always prepared and willing, pleased to meet with shareholders." Johnson said in response to an analyst's question during a conference call.
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Seems to me their losses were mainly in the European sector, possibly due to many coalition member nations that didn't like Kerry's attacks on President Bush.
hiccup.
I also did to.
My boycott of all heinz products are working, PTL!!!
Picante sauce passed catsup a few years ago in volume sales in the US.
I vaguely recall that.
I just remember thinking: hmmm liberal genes must be dominant, because none of the late Sen. Heinz genes got into his progeny.
That, or they are political opportunists.
Either way, a waste of oxygen.
Please be brave and change your taste butt!!!
He's only allowed to take the Gulfstream to Europe three times a year now instead of the usual four.
The Heinz family no longer runs the Heinz company. It is a publicly traded company just like any other on the market.
Teresa and John Kerry don't have anything to do with running the company and feeble boycotts will do nothing to affect their wealth.
SD
She sold her Heinz stock a couple years ago. Still nice to have the connection.
Pray for W and Our Freedom Fighters
That's too bad. I think I'll just go out and buy another copy of 'Unfit..' then!
I hate that SOB Kerry. That's right I said HATE! Even his name is phony
Del Monte ketchup tastes much better!
We make certain to never buy Heinz.
gives new meaning to "Heinz ketchup is soooo...slow."
So...the boycott is working?
Thanks for providing all (who take the time to read it) the latest information on Heinz company ownership.
Bagel Bites, Boston Market,Catelli,Chef Francisco,Classico,Delimex,Go Ahead!,Guloso,Heinz,John West,Ore-Ida,Orlando,Plasmon,Smart Ones,Wattie's,Weight Watchers,Wyler & Yoshida
Heinz owns companies from Australia to Zimbabwe. I doubt a few Freepers boycotting them will slow them down.
However, you can look up many companies and who owns what "brands" at:
http://www.responsibleshopper.org/
A very helpful tool if you're serious about where you want to spend your money.
I think that is the Boston Market frozen foods. Boston Market restaurants are owned by McDonald's out here on the West coast.
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