As H.J. Heinz (NYSE:HNZ) demonstrated in today's second-quarter earnings, product volume is just a small piece of the overall profit pie.

The market had expected Heinz to deliver per share earnings of $0.74. Well, Heinz trounced that forecast, increasing year-over-year EPS by 22.5% to $0.87. Net revenue increased by 3.5%, but the company managed to grow net income by 21.9%, primarily through currency hedges designed to mitigate fluctuating dollar risks. Not a bad strategy, considering the U.S. dollar has strengthened considerably in the past few months.

Heinz separates its overall revenue growth into five categories: volume, price, organic sales growth (which is volume and price combined), foreign exchange, and M&A. Quarterly volume dropped by 1.3%, but the company was able to gain 7.1% in price increases, leading to an organic sales growth rate of 5.8%. The stronger U.S. dollar led to a 3.3% decline in foreign exchange effects to revenue, while acquisitions and divestitures delivered a 1% increase in revenue.

Heinz also breaks down growth by region, with North America delivering a 9.4% increase in year-over-year revenue driven primarily by price increases. European sales were up 1.8% while Asia Pacific sales were down 2.4 %.

Heinz' volume and pricing results are in line with its foodie peers. Kraft Foods (NYSE:KFT), for example, delivered a 1% decline in case volume last month. Kellogg (NYSE:K) and General Mills (NYSE:GIS) are among those using pricing to its advantage. However, with rising commodity prices, some food producers such as Tyson Foods (NYSE:TSN) have had some tough times.

To me, this currency exchange hedging is big stuff and shows some strong management insight. An increasing number of global companies like Coca-Cola (NYSE:KO) are feeling pain as the U.S. dollar strengthens. Heinz is continuing its currency hedging for the rest of the year, which is a good idea, considering the continued global market fluctuations.

At a 4.4% dividend, Heinz shareholders are guaranteed decent income even if the market continues to drop. The company has a little more debt than I like in a company (the Long-Term Debt to Equity ratio is 2.54) and the P/E of 13.8 isn't exactly cheap in this market. I'm also a little concerned about future pricing power as global economic conditions decline. I'm not buying Heinz here, but I'll definitely keep it on my radar screen for future considerations.

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