The anticipation of H.J. Heinz's (NYSE:HNZ) second-quarter earnings results was a lot less suspenseful than waiting for that darn ketchup to flow out of the bottle. (I have learned a little trick along the way: If you give the "57" a good thump in the middle of the container, the red, tomato-based condiment flows a lot more freely. Just shake first to mix in the watery stuff on top.)

Heinz reported its earnings today, and its results were certainly mixed. The company's earnings of $0.56 per share beat last year's earnings of $0.54 per share but fell short of the analysts' consensus estimate of $0.59 per share. On the other hand, sales rose 5.2% from the previous year on a 0.5% volume increase; this result also outperformed the average estimate by 1.4%. Heinz also reduced its cash conversion cycle by another eight days.

The company now derives more than 60% of its sales from outside the U.S. From fiscal 2004 numbers, Heinz produced 39% of its sales in Europe and 15% from the Asia/Pacific region (the balance was sourced from Canada). The company claims that is has the No. 1 or No. 2 brand in more than 50 countries, adding leverage to its strategy of driving profitable growth by removing clutter and cutting costs.

It appears that Heinz needs to work a bit at driving down costs, especially in its European region. While the company's North American Consumer Products and U.S. Foodservice segments produced operating profits in the second quarter, the Asia/Pacific region was down 2.0%, and its European region saw operating profit decline 13.3%. Europe has been a consistent producer for the company as of late, but the company said it had a rough quarter mainly because of "lower pricing and increased product costs in the European seafood business, and the charge for Italian trade spending."

For the full-year fiscal 2005, the company forecasts an earnings range of $2.32 to $2.42 per share with "an expectation toward the lower half of that range." The current consensus estimate of $2.37 per share is definitely within striking distance. Heinz also disclosed that its free cash flow expectation of $800 million to $1 billion for the year is also on track.

The competition in the branded foods market continues to be as thick as a good bowl of New England clam chowder. With commodity pricing/costs still affecting companies such as Campbell Soup (NYSE:CPB), ConAgra Foods (NYSE:CAG), Kraft Foods (NYSE:KFT), and General Mills (NYSE:GIS), look to pure plays such as Hidden Gems pick Fresh Del Monte Produce (NYSE:FDP) for leadership in this industry.

With its attractive 2.97% dividend yield and abundant cash flow, H.J. Heinz holds a solid position in the Motley Fool Income Investor ranks. However, a few more quarters of underperformance might put a strain on the balance between growth and income.

Eat a hamburger and some fries, and then digest these other views:

Fool contributor Phil Wohl spent more than 12 years on Wall Street and enjoys a good hamburger with ketchup just as much as the next person. He has no stake in any firm mentioned above.