Ketchup maker H.J. Heinz Co. on Tuesday posted lower quarterly profit, hit by higher costs and a tough retail environment in Europe.
The company, known for its namesake ketchup and a host of other packaged foods, posted profit of $116.6 million, or 35 cents a share, for the fiscal third quarter ended January 25, compared with $152.4 million, or 43 cents a share, a year earlier.
Excluding one-time items, earnings from continuing operations were 50 cents a share, the company said. Analysts on average forecast earnings 56 cents a share, according to Reuters Estimates.
Analysts note that estimates were less meaningful because Heinz is in the midst of selling businesses and some of those businesses will be counted as discontinued operations once a deal is in place.
Last week, the company said it would sell its European seafood business to Lehman Brothers Merchant Banking for 425 million euros. The move was part of Heinz's efforts to improve profit in Europe, where is has been hit by higher costs in the seafood business and the growth of deep-discount retailers.
Heinz shares closed Monday at $37.60 on the New York Stock Exchange. The stock trades at about 16 times estimated 2006 earnings, compared with a multiple of 17 for the Dow Jones U.S. Food Producers Index. The stock rallied 10 percent between February 6 and February 23, boosted by talk that billionaire investor Nelson Peltz could challenge the company's management in a proxy fight.
