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Heinz To Cut Up To 1,000 Jobs

H.J. Heinz Co.'s global expansion efforts are paying off, but world's biggest ketchup maker expects to shed up to 1,000 jobs globally in fiscal 2012.

PITTSBURGH (AP) -- H.J. Heinz Co.'s global expansion efforts are paying off, driving its fiscal fourth-quarter profit up 16 percent. But the world's biggest ketchup maker also expects to shed up to 1,000 jobs globally in fiscal 2012 as it closes five factories.

The Pittsburgh company, which also raised its dividend by 7 percent on Thursday, has approximately 32,500 workers worldwide.

The company plans to close two factories in the United States, two in Europe and one in the Pacific region but didn't identify them further in its news release. It will shed approximately 800 to 1,000 positions and be left with 76 factories.

Heinz has looked to emerging markets like Brazil, Russia and India to help fuel its growth recently. The food company says that emerging markets will generate more than 20 percent of its revenue in fiscal 2012.

Heinz reported that its net income rose to $223.9 million, or 69 cents per share, for the period ended April 27. That's up from $192.4 million, or 60 cents per share, a year earlier.

But analysts polled by FactSet expected higher earnings of 72 cents per share.

Revenue increased 6 percent to $2.89 billion from $2.72 billion a year ago. Wall Street expected revenue of $2.87 billion.

Sales from emerging markets made up 17 percent of fourth-quarter sales and more than 16 percent of the company's total sales in fiscal 2011.

Brands that performed well included ABC, Complan, Smart Ones, T.G.I. Friday's and Heinz.

Heinz has acquired a number of companies recently to help develop its growth in emerging markets. The company announced in March that it was acquiring a majority stake in Brazilian food maker Coniexpress SA Industrias Alimenticias, which makes the Quero brand of ketchup and other condiments. In November, Heinz bought Foodstar, a soy sauce manufacturer in China.

Heinz raised its quarterly dividend to 48 cents per share from 45 cents per share. The dividend will be paid on July 10 to shareholders of record on June 24.

For the fiscal year, Heinz's earnings increased 14 percent to $989.5 million, or $3.06 per share, from $864.9 million, or $2.71 per share, in the previous year.

Annual revenue improved to $10.71 billion from $10.49 billion, partly helped by price increases.

Sales in Europe fell 2.9 percent, but rose 15.6 percent in the Asia/Pacific region. Sales for the rest of the world dropped 11.9 percent mostly because of the Venezuela currency devaluation.

U.S. foodservice sales dipped 1.1 percent, while North American consumer product sales gained 2.3 percent.

Heinz said it had strong sales of its namesake baby food in China, Complan and Glucon-D nutritional drinks in India, ABC soy and chili sauces in Indonesia and Heinz ketchup and baby food in Russia.

Heinz expects fiscal 2012 earnings of $3.29 to $3.39 per share, which removes about 35 cents for productivity investments. The forecast is based on projected foreign exchange rates.

Analysts predict earnings of $3.33 per share.

Heinz said it will invest about 35 cents per share, or about $160 million, to improve its manufacturing and speed up productivity in the fiscal year.

Heinz said it will create a European supply chain hub in the Netherlands to consolidate and lead procurement, manufacturing, logistics and inventory control.

For fiscal 2013, Heinz anticipates earnings between $3.60 and $3.70 per share on a constant currency basis.

The food company raised its long-term constant currency earnings per share guidance to a 7 percent to 10 percent increase. It prior outlook called for an increase of 6 percent to 9 percent.