The H. J. Heinz Company (HNZ) did not meet the net sales target for fiscal 2009. Net sales were flat year-over-year due to a 7% unfavorable currency translation, commodity inflation, and the global economic slowdown. The company had targeted sales growth of 6% for fiscal 2009. Moreover, both gross and operating margins were also down for the year.

Raw materials and packaging used in the company's business include tomato paste, grains, beef, poultry, vegetables, steel, glass, paper and resin. Many of these materials are subject to price fluctuations from a number of factors. Commodity inflation has been constricting the company's margins.

In addition, the company operates in the highly competitive food industry and experiences worldwide competition in all of its principal products. This often forces the company to reduce its pricing, while increasing marketing or other expenditures, which in turn may have a material adverse effect on its profitability. Moreover,

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Heinz (HNZ) reported modest results for the first quarter with earnings of 67 cents per share, which was 5 cents above the Zacks Consensus Estimate of 62 cents. However, earnings were down 6.9% year over year.

Quarterly net sales fell 4.5% year over year to $2.47 billion, primarily attributable to a 9% unfavorable impact from foreign exchange and a 4.3% drop in volume. The declines were partially offset by a 6% gain from pricing and a 2.9% benefit from divestitures. The current economic weakness reduced the overall product demand and hurt the top line. Organic sales, excluding the impact of foreign exchange, grew 1.7% during the quarter.

The North American Consumer Products segment reported a 1.9% drop in sales as volumes fell 4.9%. The decline was attributable to lower promotional volume in Ketchup and frozen meals, which was partially offset by increases from the new T.G.I. Friday’s snacks

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• Mining firm Rio Tinto (NYSE:RTP) reported lower commodity prices and Chinalco expenses resulted in disappointing first half results of $2.57 billion, down 65% YoY. The company said it may declare a final dividend, subject to "satisfactory trading results, progress on divestments and prevailing market conditions"

• Sears Holdings (NASDAQ:SHLD), the largest US department store firm, reported a surprise second quarter loss of 17 cents a share ex-items, compared with last year's 50 cent a share profit, and well off Zacks estimates for a 35 cent profit 

• Heinz (NYSE:HNZ) reported first quarter earnings of 67 cents a share, 5 cents ahead of Zacks estimates, on better-than-expected revenues of $2.47 billion, versus Zacks estimates of $2.44 billion.  The firm backed its yearly outlook

• Hormel (NYSE:HRL) reported third quarter earnings of 57 cents a share, beating Zacks projections of 52 cents a share; revenues fell 6.2% to $1.57 billion, off Zacks estimates of

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For Immediate Release

Chicago, IL – July 13, 2009 – Zacks Equity Research highlights Heinz (HNZ) as the Bull of the Day and Xtent, Inc. (XTNT) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Boeing (BA), Caterpillar (CAT) and Microsoft (MSFT).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day:

Growth in Heinz’s (HNZ) domestic businesses, strengthening international operations, and the reallocation of resources in favor of key brands are major positive trends for the company.

Despite cost pressure from higher commodity costs, strong pricing of 3.5% to 4.5% has allowed the company to report positive earnings surprises in the last twelve quarters. Management expects net sales to increase by 4% to 6% in fiscal 2010 driven by new

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There is an increasing shift towards private labels, as branded products become dearer for budget-conscious consumers.Private Label products are gaining momentum since the third quarter of 2008, especially among budget-conscious consumers in a recession struck economy. According to a survey conducted by the Private Label Manufacturers Association (PLMA) and Gfk Custom Research, 91% of the people surveyed stated that, they will continue buying private label products even after the recession ends.More than 60% of the U.S. population considers private label brands as good as branded products, and approximately 30% rate the private label products higher than branded ones. Even retail giants like Wal-Mart (WMT) are revamping their shelves with more private label products to increase profit and store visits by customers.Further, according to a report on private label food and beverage trends by NPD Group, 24% of the overall consumption ...

Most companies like Avon (AVP), Campbell Soup (CPB), Coca-Cola (KO), PepsiCo (PEP), H.J. Heinz (HNZ) and Procter & Gamble (PG) are depending on the developing markets of Asia/Pacific and China for growth.

In spite of the current economic meltdown, sales growth has been recorded across companies for this segment. For example, Avon's sales grew 9% in China while Procter & Gamble saw sales growth of 11% in the Asia Pacific region. In addition, soup companies such as Campbell Soup are also targeting markets, including China (Shanghai is the leading soup market in China with highest per capita soup consumption with almost 72% of the population consuming a bowl of soup everyday) for expansion. Also, in case of Heinz, Asia accounts for a big market, although sales in 2009 increased only 1.6%,

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Dell (

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According to reports in foreign media, a survey conducted by the British Children's Food Campaign shows that many Heinz products contain too much saturated fat, salt, and sugar, and hence they pose a threat to the health of children who eat them. The Children's Food Campaign, reportedly started a survey entitled "junk food for babies" in [...]

H J Heinz Co.'s (HNZ) MACD indicator has moved into bullish territory with a reading of 0.0202. The Zacks #2 Rank ("Buy") stock has advanced more than 1% to $34.16 in afternoon trade. The company has either met or topped the consensus estimate in each of the last 4 quarters with an average surprise of 14.61%, or 10 cents per share.

Zacks Investment Research

Growth in Heinz's (HNZ) domestic businesses, strengthening international operations, and the reallocation of resources in favor of key brands are major positive trends for the H. J. Heinz Company.

Despite cost pressure from higher commodity costs, strong pricing of 3.5% to 4.5% has allowed the company to report positive earnings surprises in the last eleven quarters. Management expects net sales to increase by 6% in fiscal 2009 driven by new product introductions and positive pricing.

In addition, the stock's valuation is attractive. A Buy rating was initiated in January.Zacks Investment Research