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Heinz Faces a Difficult Year

Shubh Datta
May 31, 2012

Heinz's (NYSE: HNZ  ) drive to grow its global productivity took its toll as the company's fourth-quarter profits dropped by 22%. On the brighter side, when you exclude these one-time charges, the company's adjusted profits rose by 8%. While Heinz did reduce its growth outlook in the face of tough economic conditions, the company also came out with plans to spend more to help drive its business forward.          

Tough times
It's been a challenging environment for food makers across the board as they've tried to combat the pressures of rising input costs by increasing prices. Some companies have had an easier time doing this than others. And big steps have had to be taken. General Mills (NYSE: GIS  ) recently announced it would look to cut 850 jobs and use those savings to help make new products to drive sales.     

The quarter at hand
Turning to Heinz's fourth quarter, total revenue increased by 6% from the year-ago period. Sales growth was driven by double-digit growth from emerging markets, with organic sales in the region rising by 17%. Heinz's acquisition of Brazilian food company Quero helped drive additional sales growth, as well. Overall, Heinz's global portfolio posted a 4.5% rise in organic s