H.J. Heinz Beats Analyst Estimates on EPS

Seth Jayson, The Motley Fool
Updated

H.J. Heinz (NYS: HNZ) reported earnings on Feb. 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 25 (Q3), H.J. Heinz met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved and GAAP earnings per share improved.

Margins dropped across the board.

Revenue details
H.J. Heinz booked revenue of $2.92 billion. The 13 analysts polled by S&P Capital IQ looked for sales of $2.89 billion on the same basis. GAAP reported sales were 7.2% higher than the prior-year quarter's $2.72 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.95. The 16 earnings estimates compiled by S&P Capital IQ averaged $0.85 per share on the same basis. GAAP EPS of $0.88 for Q3 were 4.8% higher than the prior-year quarter's $0.84 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 36.4%, 140 basis points worse than the prior-year quarter. Operating margin was 15.6%, 50 basis points worse than the prior-year quarter. Net margin was 9.8%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $3.08 billion. On the bottom line, the average EPS estimate is $0.79.

Next year's average estimate for revenue is $11.67 billion. The average EPS estimate is $3.33.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 812 members out of 862 rating the stock outperform, and 50 members rating it underperform. Among 286 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 277 give H.J. Heinz a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on H.J. Heinz is outperform, with an average price target of $55.75.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of H.J. Heinz. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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