H.J. Heinz posted a higher quarterly profit Friday and said it expects full-year profits to be near the top of its forecast range, helped by new products, the weak dollar and stepped-up marketing.
The company, which makes Ore-Ida potatoes, Smart Ones frozen meals and Heinz ketchup, said profit rose to $205.3 million, or 63 cents a share, in the first quarter ended August 1, from $194.1 million, or 58 cents a share, a year earlier.
Last week, Heinz had said it expected earnings to be 62 to 63 cents a share, a forecast above what was then the consensus analysts' estimate of 55 cents a share.
Sales rose 9.1% to $2.25 billion. Excluding currency fluctuations and the impact of acquisitions and divestitures, sales rose 5.3%, driven by double-digit growth in ketchup, beans, soups, and Smart Ones meals, the company said. Marketing spending rose 25%.
Heinz has boosted development of new products and ramped up spending on marketing while also taking steps to improve productivity that have helped offset higher prices for corn-based sweeteners, oils and other ingredients.
Commodity costs rose 4.7% in the quarter, while the company increased prices an average of 2.8%, Heinz said.
The company said it now expects earnings for the year to be near the top of its previous forecast range of $2.54 a share to $2.60 a share. Analysts on average have forecast $2.60 a share, according to Reuters Estimates.
Heinz shares closed Thursday at $45.22 on the New York stock Exchange. The stock is about flat this year, compared with a 2.6% increase for the Standard & Poor's packaged foods index.