H.J. Heinz Co posted a higher quarterly profit on Friday and said it expects full-year profits to be near the top of its forecast range, helped by new products, the weak dollar and stepped-up marketing.
The company, which makes Ore-Ida potatoes, Smart Ones frozen meals and Heinz ketchup, said profit rose to $205.3 million, or 63 cents a share, in the first quarter ended August 1, from $194.1 million, or 58 cents a share, a year earlier.
Last week, the company had said it expected earnings to be 62 to 63 cents a share, a forecast above what was then the consensus analysts' estimate of 55 cents a share.
Sales rose 9.1 percent to $2.25 billion. Excluding currency fluctuations and the impact of acquisitions and divestitures, sales rose 5.3 percent, driven by double-digit growth in ketchup, beans, soups, and Smart Ones meals, the company said.
Marketing spending rose 25 percent, the company said.
Heinz has boosted development of new products and ramped up spending on marketing while also taking steps to improve productivity that have helped offset higher prices for corn-based sweeteners, oils and other ingredients.
Commodity costs rose 4.7 percent in the quarter, while the company increased prices an average of 2.8 percent, Heinz said.
The company said it now expects earnings for the year to be near the top of its previous forecast range of $2.54 a share to $2.60 a share. Analysts on average have forecast $2.60 a share, according to Reuters Estimates.
Heinz shares closed Thursday at $45.22 on the New York stock Exchange. The stock is about flat this year, compared with a 2.6 percent increase for the Standard & Poor's packaged foods index.
(Reporting by Brad Dorfman)