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johnson also indicated that heinz's second-quarter earnings could fall below analysts' estimates, though the company stood by its full-year forecast. "the near-term economic outlook for the u.s. and europe remains pretty dreary, marked by high unemployment and low consumer confidence," johnson said during a conference call on wednesday following the release of the company's first-quarter earnings. "many consumers have gone into what i like to term as economic hibernation, eating at home more often, eating out less, reducing spending and worrying more about the future," he said. johnson said the company, maker of heinz ketchup and ore-ida french fries, is focusing on areas where it can see the best long-term returns. the company has relied on growth in emerging markets, which accounted for almost 18 percent of its sales in the quarter ended july 28. that helped offset performance in the u.s. market where retailers and manufacturers have resorted to steep promotions to lure cash-strapped consumers. heinz sees more acquisition opportunities in emerging markets now than in the last five yeas, johnson said. "we are not spending much time looking for m & a opportunities in the united states and western europe. our focus is almost entirely on the emerging world," he said. while johnson would prefer to buy a smaller business and grow it, he did not rule out making a larger acquisition. emerging markets goal heinz has said it plans to generate at least 20 percent of its global sales from emerging markets by 2013, but it may be possible to reach that goal sooner, johnson said. sales in emerging markets like russia, india and indonesia rose 21.9 percent in the first quarter, excluding the impact of acquisitions, divestitures and currency fluctuations, compared with global growth of 3.6 percent, the company said. sales rose 4.8 percent at north american retailers, with volume up 5.3 percent. but prices were down 2.7 percent, and a quarter of the volume increase came from sales at wal-mart stores inc, which discounted heinz ketchup to attract customers. gross margin rose to 36.6 percent from 35.7 percent a year earlier. heinz confirmed the preliminary earnings data it released tuesday. net income rose to $240.4 million, or 75 cents per share, in its fiscal first quarter from $212.6 million, or 67 cents per share, a year earlier. sales rose 1.6 percent to $2.48 billion. johnson said he expected second-quarter profit to mirror that of the first quarter. analysts on average forecast 81 cents a share for the quarter, according to thomson reuters i/b/e/s. heinz shares were up 3 cents at $46.27 in morning trade on the new york stock exchange.
Source :flex-news-food.com
Date :
1
September
2010
Category :
food industries Economic
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