PITTSBURGH (AP) — Food maker H.J. Heinz Co., which is being bought by Warren Buffett's Berkshire Hathaway and 3G Capital for $23.3 billion, on Thursday reported a 5 percent drop in its fiscal third-quarter net income as higher sales in emerging markets were offset by costs related to selling a frozen food business in China.
Like many in its industry, Heinz has looked abroad for growth as sales in mature markets like North America and Europe slow down. Heinz has a growing stable of sauces suited to local tastes around the world. The maker of Heinz ketchup, Classico pasta sauce and Ore-Ida potatoes said emerging markets including Latin America, Indonesia and China drove growth, with sales in that segment up nearly 19 percent.
Global ketchup sales rose nearly 5 percent, driven by strong performance in Russia, Latin America and Canada. Countering the sales growth, however, Heinz booked a loss of $36 million to write off Shanghai LongFong Foods, a frozen food business in China that it plans to sell over the next year.
Net income for the three months ended Jan. 27 totaled $269.5 million, or 83 cents per share. That compares with $284.7 million, or 88 cents per share, last year. Excluding one-time items, net income from continuing operations totaled 99 cents per share, easily beating the 90 cents per share expected by analysts, according to Fact Set.
Revenue rose 2 percent to $2.93 billion from a year ago, coming in shy of the $2.99 billion that analysts had forecast.
Shares rose 5 cents to close at $72.19 before the report; they were unchanged in after-hours trading.