Three of the world’s biggest food makers reported a weak set of results for their most recent quarters, forcing two of them to lower or narrow their forecasts for the full year.
Heinz said net profit for its third quarter ending 25 January rose by just 4% to $284.7m, while revenue grew by 7% to $2.92bn. The company said sales of its core ketchup ranges rose by 9%, helped by growth in Latin America, although sales at its North American consumer division fell 1%. The company also noted that volumes were hurt after its recent price hike.
Heinz said it now expects full-year earnings of $3.27 to $3.29 per share excluding a benefit of 5 cents per share from foreign currency exchange rates and one-time charges. This compares to its previous forecast of earnings of $3.24 to $3.32 per share.
Meanwhile, Campbell Soup saw its second-quarter net profit drop by 14% to $205m (64 cents per share), with revenue down nearly 1% to $2.11bn. The company said it spent more on marketing, while also reduced discounting, both of which hurt sales volume.
Sales were down 2% in the US, but the company said profit had improved for the fourth consecutive quarter, adding that it expects sales to improve in the second half “as we continue to shift our emphasis to brand building efforts that will drive consumer usage”. Sales of Campbell-brand condensed soups rose 5%, but sales of ready-to-serve soups fell 12%, and sales of sauces were down 2%. Baking and snacking revenue was flat, but beverage revenue rose 4%.
Finally, General Mills has said it expects third quarter profit to come in at between 54 cents to 56 cents, considerably below analysts’ estimates, due to weak volume in the US. The maker of brands such as Cheerios and Progresso also lowered its full-year profit guidance to $2.53 to $2.55 a share, from its earlier forecast of $2.59 to $2.61 per share.
NamNews - Monday 20th February 2012