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Heinz Profit Falls, Plans 2,700 Job Cuts
Associated Press ^ | 6/1/2006 | AP

Posted on 06/01/2006 6:26:14 AM PDT by xrp

Ketchup Maker Heinz Sees 4Q Profit Fall, Plans 2,700 Job Cuts

PITTSBURGH (AP) -- Food producer H.J. Heinz Co. on Thursday said fiscal fourth-quarter profit dropped 19 percent, and said it plans to cut 2,700 jobs, or 8 percent of its work force, and exit 15 plants this year as part of a plan to cut costs and resume earnings growth.

Heinz is facing pressure from billionaire investor Nelson Peltz to improve shareholder return. Earlier in the month Peltz and his Trian Group outlined a plan, which was rejected by Heinz, to improve profit by cutting costs and reducing incentives to retailers.

The maker of ketchup, sauces, pasta and frozen foods said profit for the quarter ended May 3 declined to $167.9 million, or 50 cents per share, from $206.5 million, or 59 cents per share during the same period last year.

Results include charges totaling 5 cents per share relating to the sale of assets and a write-down of the company's operations in Zimbabwe, offset by a gain from the sale of its European Seafood and Tegel poultry business. Increased interest costs and a substantially higher quarterly tax rate compared to last year also hurt results, the company said

Revenue grew nearly 8 percent to $2.4 billion from $2.23 billion, helped by double-digit growth in brands including Smart Ones meals, Classico pasta sauce and Ore-Ida potatoes.

Analysts, on average, predicted a profit of 49 cents on revenue of $2.36 billion, according to a Thomson Financial poll.

Heinz also outlined a growth plan for 2007 and 2008. The plan includes reducing costs by $355 million, in part by cutting 2,700 jobs and exiting 15 plants in fiscal 2007. It did not identify the plants in a news release. Heinz also said it was considering exiting five additional plants in fiscal 2008.

Heinz's plan also includes cutting $145 million "in deals and allowances" to those who carry its products.

At the same time, the company said it is authorizing a $1 billion share repurchase program in fiscal 2007 and 2008, and would boost its dividend by 16.7 percent to $1.40 a share in fiscal 2007 from $1.20 a share last fiscal year.

For all of fiscal 2006, profit declined 14 percent, to $645.6 million, or $1.89 per share, from $752.7 million, or $2.13 per share last year. Revenue grew 7 percent to $8.64 billion, from $8.1 billion last year.

The company expects to earn $2.35 per share in 2007 and $2.54 per share in 2008. The company expects sales growth of 3 percent to 4 percent in 2007 and 4 percent or higher in 2008.


TOPICS: News/Current Events
KEYWORDS: economy; heinz; outsourcing; terezacrapsonthepoor


1 posted on 06/01/2006 6:26:16 AM PDT by xrp
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To: xrp

"My name is John Kerry, and I'm all for the little people."

"Psst... You can't call them little people anymore. They're economically challenged."

"Oh. Ahem, my fellow Americans - I'm all for the economically challenged."

Crowd says, "Huh? Is he talking to us?"


2 posted on 06/01/2006 6:34:40 AM PDT by coconutt2000 (NO MORE PEACE FOR OIL!!! DOWN WITH TYRANTS, TERRORISTS, AND TIMIDCRATS!!!! (3-T's For World Peace))
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To: xrp

BTW..did you know that Lynn Swann is on Heinz' board?


3 posted on 06/01/2006 6:35:54 AM PDT by ken5050 (GWB, Reagan, Thatcher, Pope John Paul II, freed hundreds of millions.# of Nobel PeacePrizes: ZERO)
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To: xrp

Too much more of this kind of news and Theresa's really going to be hitting the raisins...


4 posted on 06/01/2006 6:38:53 AM PDT by Joe 6-pack (Que me amat, amet et canem meum)
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To: ken5050

*****BTW..did you know that Lynn Swann is on Heinz' board?*****

Probably got the position by kicking butt with the Steelers back in the day...at Heinz Field.


5 posted on 06/01/2006 6:39:27 AM PDT by Zeppelin
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To: ken5050

no, did not know he was on the Heinz board....is just another reason for the Dem Union lemmings around here to go flocking to Rendell and Casey....as they all know, it's the gub-mint's job to keep them employed.


6 posted on 06/01/2006 6:40:53 AM PDT by Buckeye McFrog
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To: xrp

poor, poor tareza


7 posted on 06/01/2006 6:41:01 AM PDT by camle (Keep your mind open and somebody will fill if full of something for you.)
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To: xrp

"Results include charges totaling 5 cents per share relating to the sale of assets and a write-down of the company's operations in Zimbabwe"


Mugabe 1
TerrrrAAYzah 0


8 posted on 06/01/2006 6:41:41 AM PDT by Buckeye McFrog
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To: xrp

I haven't bought a heinz product since this noxious fool started using their money for his ambitions.


9 posted on 06/01/2006 6:41:52 AM PDT by silverleaf (Fasten your seat belts- it's going to be a BUMPY ride.)
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To: xrp

Well, if they're behind the competition they'll just have to ketchup...(collective groan)


10 posted on 06/01/2006 6:43:20 AM PDT by BILLNHILL MAKE ME ILL (Never forget our troops or what they are doing for us...)
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To: xrp

Pretty soon Kerry and Momma-T will have to sell the Scaramouche if this keeps up!


11 posted on 06/01/2006 6:44:33 AM PDT by Disturbin (Hey Hey, Ho Ho, The Illegals Have to GO)
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To: coconutt2000

I know I have not bought any of their product since 2003. Besides wally world has good generics.


12 posted on 06/01/2006 6:44:56 AM PDT by Hydroshock ( (Proverbs 22:7). The rich ruleth over the poor, and the borrower is servant to the lender.)
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To: xrp

One of the things they never mention is that ketchup sales are down because salsa is now the number one condiment (thanks George Costanza). Speedy Gonzales is loving this!


13 posted on 06/01/2006 6:47:48 AM PDT by Disturbin (Hey Hey, Ho Ho, The Illegals Have to GO)
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To: xrp

As a stockholder, this is a good thing. Looks like the market thinks so as well...already up almost 3% and near the 52-week high.


14 posted on 06/01/2006 6:58:08 AM PDT by ContemptofCourt
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To: xrp

Heinz resembles the baby tomatoe in the Pulp Fiction catchup joke.


15 posted on 06/01/2006 6:59:00 AM PDT by SamAdams_Lite
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To: xrp

They should sell off their frozen foods line. It's an oversaturated market already.


16 posted on 06/01/2006 7:03:17 AM PDT by Extremely Extreme Extremist (Conservatism is moderate, it is the center, it is the middle of the road)
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To: xrp
The Heinz family doesn't run the Heinz corporation. It's a publicly traded corporation and it is run by professional managers.

And if you want to prevent Teresa and John Kerry from having access to the Heinz fortune, you'd need a time machine.

SD

17 posted on 06/01/2006 7:15:58 AM PDT by SoothingDave
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To: silverleaf

See what Freeper Power can do? I'll bet a lot of us don't buy Heinz --- I don't.


18 posted on 06/01/2006 7:16:16 AM PDT by EnquiringMind
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To: camle
poor, poor tareza

In between popping gin-soaked raisins, she was heard to mutter something about profits being down due to "scumbags"...

19 posted on 06/01/2006 7:18:10 AM PDT by COBOL2Java (Freedom isn't free, but the men and women of the military will pay most of your share)
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To: EnquiringMind
See what Freeper Power can do? I'll bet a lot of us don't buy Heinz --- I don't.

Did you miss the part where revenues are up....you know, they sold more stuff...

20 posted on 06/01/2006 7:21:33 AM PDT by ContemptofCourt
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To: ContemptofCourt

Did you miss the part where revenues are up....you know, they sold more stuff...

LOL -- guess so!


21 posted on 06/01/2006 7:28:13 AM PDT by EnquiringMind
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To: Zeppelin

Swann played in Three Rivers Stadium.


22 posted on 06/01/2006 9:55:25 AM PDT by A.A. Cunningham
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Kerry outsourcing
23 posted on 06/01/2006 9:57:46 AM PDT by A.A. Cunningham
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To: silverleaf

Me neither. I didn't know Ore-Ida was Heinz-owned. Cross them off the list, too.


24 posted on 06/01/2006 9:58:24 AM PDT by CholeraJoe (Bayonet the wounded!)
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To: A.A. Cunningham

oh. good call. thanks for the correction!

I'm a youngin', so I dont remember details like that! =P


25 posted on 06/01/2006 10:23:23 AM PDT by Zeppelin
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