HEINZ REPORTS 25% DROP IN 3RD QUARTER EARNINGS

Blames Declines of Weak Foreign Markets, Ongoing Restructuring

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NEW YORK (AdAge.com) -- H.J. Heinz Co., Pittsburgh, today reported a third-quarter earnings decline of 25%.

The results, a fall from 65 cents to 57 cents per share, were in line with analyst expectations, but still disappointing.

Heinz said that

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the results showed the impact of weak performance in pet products, seafood and food service businesses as well as the weakness of major foreign currencies, since 50% of revenue comes from international markets.

Year-to-date, Heinz said it expects marketing to reach as high as 10% of sales vs. historical spending in the low single digits as it reinvests much of the $400 million in recent restructuring savings toward new products.

Going through five years of restructuring "tends to put people off balance," said Art Winkleblack, Heinz's new executive vice president and chief financial officer.

Mr. Winkleblack declined to comment on estimates for Fiscal 2003, which begins in May, explaining that he is still going through operating plans.

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