UPDATE 2-Heinz cuts outlook; shares dip

Thu May 24, 2012 9:55am EDT

* Q4 adj EPS 81 cents vs Wall Street view 79 cents

* Sales $3.05 bln vs Street view $3.07 bln

* Cuts 2013 EPS view to $3.52-$3.62 from $3.60-$3.70

* Shares down 2 pct in early trading

By Martinne Geller

May 24 (Reuters) - H.J. Heinz Co reported slightly weaker-than-expected fourth-quarter sales, hurt by a decline in North America, and lowered its earnings forecast for the new fiscal year and beyond.

The ketchup maker's shares fell 2 percent, even though its quarterly profit topped the average Wall Street estimate.

Heinz, which sells Ore-Ida frozen potatoes and other packaged foods in addition to its namesake ketchup, said North American sales declined 2.2 percent in the quarter as price increases taken to offset commodity costs hurt sales volume.

Still, its U.S. foodservice business, which supplies restaurants and other businesses, saw sales increase.

The company forecast earnings of $3.52 to $3.62 per share for fiscal 2013, which started on April 30, on sales growth of at least 4 percent.

It previously forecast $3.60 to $3.70 per share. Analysts on average were expecting $3.59, according to Thomson Reuters I/B/E/S.

The new range represents growth of 5 percent to 8 percent, which is below the company's long-term earnings growth target. Heinz said that over the next three to five years, it is aiming for earnings growth of 6 to 9 percent, down slightly from its prior goal of 7 to 10 percent.

In the just-ended fourth quarter, net earnings were $175.3 million, or 54 cents per share, down from $223.9 million, or 69 cents per share, a year earlier.

Excluding pretax charges of $113 million, Heinz earned 81 cents per share. On that basis, analysts were expecting 79 cents per share.

Gross margin, excluding charges, shrank 1.5 percentage points due to higher commodity costs and lower-priced products making up a greater proportion of sales. That more than offset the benefits from price increases and productivity improvements.

Sales rose nearly 6 percent to $3.05 billion, helped by 17 percent growth in emerging markets and two extra shopping days in the quarter. Analysts were expecting $3.07 billion.

The company also raised its dividend by 7.3 percent, declaring a quarterly dividend of 51.5 cents, payable on July 10.

Heinz shares fell $1.04, or 2 percent, to $52.82 in early trading on the New York Stock Exchange.