H.J. Heinz Posts 22 Percent Rise In Q2 Earnings

November 21, 2008 8:24 p.m. EST

Pittsburgh, PA (AHN) - H.J. Heinz Co. announced Friday it's fiscal second quarter earnings rose 22 percent on strong revenue and currency hedging benefits.

The company best known for its namesake ketchup posted second quarter earnings of $276.7 million or 87 cents a share, up from $227 million or 71 cents a share in the same period a year ago.

Heinz said profits were helped by a $92 million pretax gain from hedges used to reduce currency exchange exposure.

Revenue grew to $2.61 billion, up 4 percent from $2.52 billion last year.

The results were mixed, earnings topped the 76 cents a share analysts were expecting, but revenue fell short of expectations for $2.7 billion.

In order to offset rising input costs, Heinz raised product prices by 7.1 percent higher worldwide and 8 percent higher in the U.S. The company did see total volume drop 1.3 percent in the quarter.

Heinz said it saw 8.5 percent sales growth in its top 15 brands, which represent roughly 70 percent of their sales. Ketchup and its Ore-Ida Steam N' Mash potatoes product both produce double-digit sales growth.

Looking forward, Heinz reaffirmed its full-year guidance for earnings of $2.87 to $2.91 a share. Analysts on average are expecting $2.91 a share.