Heinz Shares Dip as Developed Economies Feel the Squeeze

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High sales growth in emerging markets couldn’t save a so-so quarter from Heinz (HNZ), and the company’s shares slid 2.8% in morning trading.

The ketchup and packaged food company posted 81 cents of EPS after excluding one-time items, a penny better than expectations. Heinz said organic sales grew 16% in emerging markets, and 1.5% overall. Higher prices accounted for 4.4% growth in organic sales, but volume fell 2.9%.

Heinz also said it is closing three factories in response to the difficult economic environment.

“Developed Markets are experiencing low consumer confidence, high unemployment and economic uncertainty. As a result, Heinz is launching a number of innovative new products in the third quarter that have been tailored specifically to meet the needs of U.S. consumers with tight grocery budgets,” said CEO William R. Johnson in a statement.

The company maintained its previous 2012 earnings expectations.



Original Article Source by Barrons.com