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Heinz raises 1st quarter outlook

Strong volume, sales attributed

PITTSBURGH — Food maker H.J. Heinz on Wednesday raised its first-quarter outlook because of strong sales and volume growth.

The Pittsburgh-based company, which is engaged in a proxy battle with a group led by billionaire investor Nelson Peltz, also said it was on track to meet its full-year earnings forecast of $2.35 per share.

Heinz projects earnings per share for the quarter ending Aug. 2 will climb nearly 20 percent from last year's earnings from continuing operations of 47 cents per share, which excluded charges of 7 cents.

Analysts surveyed by Thomson Financial on average predicted a profit of 52 cents per share for the quarter and $2.33 for the full year.

The company projects operating income growth of about 10 percent from continuing operations for the quarter, excluding last year's special items of $32 million.

Heinz sees volume growth of more than 3 percent, and overall sales growth of more than 6 percent over last year's $2.11 billion, helped by strong performance in the United States, Canada, Italy, Indonesia and Australia.

Wall Street projects sales of $2.05 billion.

Heinz recently completed a four-year restructuring program to encourage growth in three food categories: ketchup and sauces, meals and snacks, and infant nutrition.

William Johnson, Heinz' chief executive, said in a statement that "the transformative steps we have taken over the past four years are paying off and driving this year's performance."

He said the company anticipates "the ability to support additional innovations in our core businesses in order to sustain our growth in the coming years."

But Heinz has faced criticism over its weak stock performance, and a dissident shareholder group led by Peltz has nominated five members to the 12-member board as part of an effort to boost returns.

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