H. J. Heinz Company (NYSE: HNZ) announced its results for the fourth quarter on May 24, 2012. HJ Heinz manufactures food products, including ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, infant nutrition and other food products.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability.SEE: How To Decode A Company's Earnings Reports
The Numbers:
H. J. Heinz posted an EPS above analyst expectations, despite revenues falling short of predictions. The company reported adjusted net income of 81 cents per share versus the 79 cents per share estimate and revenues of $3.05 billion versus the $3.07 billion estimate. Revenue climbed 5.6% from the same period last year. H. J. Heinz's revenue has grown during each of the past four quarters on a year-over-year basis. The company's net income for the quarter fell 20.7% to $177.6 million.
Management Quote:
Heinz Chairman, President and CEO William R. Johnson said: "Heinz delivered strong fourth-quarter results led by our trio of growth engines - Emerging Markets, Global Ketchup and our Top 15 Brands. Excluding special charges, Heinz grew earnings per share by more than 17% and we delivered our 28th consecutive quarter of organic sales growth, supported by increased investments in marketing, productivity and Emerging Markets capabilities."
A Look Back:
Gross margin shrank 3.4 percentage points to 32.9%. The contraction appeared to be driven by increased costs, which rose 11.3% from the year earlier quarter while revenue rose 5.6%.
Net income has dropped 2.4% year-over-year on average across the last five quarters. Performance was hurt by a 20.7% decline in the most recent quarter from the year-earlier quarter.
Looking Ahead:
Analysts are pessimistic about the company's results for the next quarter. The average estimate has fallen for the first quarter of the next fiscal year to 82 cents per share, down from 83 cents seven days ago. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. In the past month, the average estimate for the fiscal year has fallen from $3.34 per share to $3.33 abs.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
