CORRECTED - WRAPUP 1-Heinz profit up; Hormel hurt by turkey costs
(Corrects name of analyst in paragraph 5)
* Overseas sales, price increases help Heinz
* More weakness seen at Hormel turkey business
* Heinz sees full-year profit at top half of forecast
* Heinz shares up 2 percent in early trading
By Brad Dorfman
CHICAGO, Aug 21 (Reuters) - Price increases and new product sales helped H.J. Heinz Co HNZ.N post a bigger-than-expected rise in quarterly profit on Thursday, while earnings fell at Spam lunch meat maker Hormel Foods Corp (HRL.N) because of increased costs at its Jennie-O turkey business.
Like most food companies, Heinz and Hormel have suffered from rising commodity costs. But soaring corn feed costs particularly hit Hormel, since it also raises turkeys that it sells.
Heinz, whose shares have risen nearly 11 percent this year, has been one of the better-performing food companies as it benefits from its business overseas, new products in the United States and increased spending on marketing.
The world's largest ketchup maker has also sold more products overall. Despite the price increases, volume rose 5 percent in the first quarter ended on July 30.
Organic sales, which exclude currency fluctuations, rose 10.2 percent, J.P. Morgan Securities analyst Terry Bivens wrote in a research note.
"We believe this may be the strongest organic growth that the company has posted in the past decade," he said.
Heinz shares were up about 2 percent at $52.60 in trading before the market opened, while Hormel closed at $35.14 on the New York Stock Exchange on Wednesday.
Heinz, which also makes Ore-Ida potatoes and Smart Ones frozen meals, said quarterly profit rose to $229 million, or 72 cents a share, from $205.3 million, or 63 cents a share, a year earlier.
Analysts on average forecast earnings of 66 cents a share, according to Reuters Estimates.
Hormel was also hurt by a glut of turkey breast in the market, which weighed on selling prices.
The company said earlier this month that it expected more pressure from that business in the current quarter.
For Hormel, profit fell to $51.9 million, or 38 cents a share, in the third quarter ended July 27, from $57.4 million, or 41 cents a share, a year earlier.
The results met the analysts' average forecast and were in line with the company's Aug. 8 outlook of 37 cents to 39 cents a share.
Sales rose 10 percent to $1.68 billion, and volume increased 7 percent.
Profit fell 61 percent in the Jennie-O turkey business and dipped 1 percent in refrigerated foods. Grocery earnings rose 10 percent, helped by strength of the Hormel and Stagg chilis. (Editing by Lisa Von Ahn)
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