H.J. Heinz Company reported a 16% drop in second-quarter profit but sales at the condiment maker were higher, led by increased appetite in emerging markets.
Heinz reported sales rose 2.5% to $2.67 billion US during the second quarter. Operating income grew 6% to $408 million with gross margins improving in step.
Price adjustments and better sales of nutritional beverages in India, as well as ketchup and baby food in both Latin America and Russia led to the 18th consecutive quarter for growth in emerging markets, the company said.
“Heinz delivered a strong financial performance in an adverse economic climate, led by our growing strength in emerging markets," said Heinz Chairman, President and CEO William R. Johnson in a statement.
The Pittsburgh-based company reported earnings per share of $0.76 US, that's $0.10 lower than the same period one year earlier. The decline reflects a one-time loss on the sale of a small non-core business in U.S. Foodservice.
The December 2008 acquisition of Golden Circle in Australia also expanded Heinz’s Health & Wellness platform in beverages.
Heinz revised its full year outlook to a range of $2.72-$2.82 US from its original range of $2.60-$2.70 US. The operating free cash-flow forecast was also improved to approximately $1 billion US for the year, from an earlier range of $850-$900 million US.
