Heinz Posts a Profit and Raises Its Forecast

The company posted a 7 percent increase in fiscal fourth-quarter profit, in line with analysts’ estimates, helped by price increases and the weak dollar.

The company, which makes Heinz ketchup,
Ore-Ida frozen potatoes and many other packaged foods, said it
expects earnings to grow 8 to 11 percent a share annually over the
next two years, up from a previous target of 7 to 9 percent.

Heinz said it plans to introduce 400
new products over the next two years and spend an additional $60
million to $100 million to market them.

The company said profit was $194.1
million, or 61 cents a share, in the quarter, up from $181.0 million,
or 55 cents a share, a year earlier. Sales in the period, which ended
April 30 and was the fourth quarter of Heinz’s fiscal year, rose 11
percent to $2.69 billion.

“This is very reminiscent of the late
’70s and early 1980s, and we’re dealing with the pressures of
significant cost inflation, which has risen twice as fast in half the
time, along with weak economies and related uncertain consumer
behavior,” William R. Johnson, Heinz’s chief executive, said
during a meeting with analysts.

But the current environment is
different because of rapid growth in emerging markets and more
interest by consumers in buying products with health and wellness
benefits, he said.