"Let Them Eat Ketchup"

They are..

H. J. Heinz Co. (NYSE:HNZ) said Friday its third-quarter profit totaled $277 million, or 87 cents a share, from $227 million, or 71 cents a share, in the same quarter a year before. Analysts had expected adjusted earnings on average of 74 cents a share, according to a FactSet Research survey. Revenue for the quarter was $2.61 billion compared to $2.52 billion in the year-ago period. The food giant also reaffirmed its forecast for full-year organic sales growth of at least 6% and profit in the target range of $2.87 to $2.91 a share for the current 2009 fiscal year, which ends April 29.

Historically in the food industry, a lot of this pricing has not been given back," Chief Executive William Johnson said on a conference call Friday.

Food companies have raised prices steadily over the last year amid soaring commodity prices. Investors and analysts have been watching closely to see how these companies now will handle the subject of price increases as commodities have pulled back and global economies have weakened. Price increases play a big role in offsetting costs, but in a weak economy companies run the risk of pushing away penny-pinching consumers. There has been some speculation that retailers may also be resisting efforts by manufacturers to raise prices.
Johnson said that the company took a fair amount of price hikes in the second quarter and that discussions with retailers on pricing are a "little more difficult."

"We plan on less pricing going forward, but we do anticipate some offsetting benefits from the decline in commodity prices over time," Johnson said.

Heinz's second-quarter net income rose on higher prices and a currency-hedge gain.

While its North American consumer-products business saw 2.9% volume growth amid strength in its biggest products, including Heinz Ketchup and Ore-Ida potatoes, declines in Europe, Asia and at restaurants resulted in overall volume falling 1.3%. Credit Suisse analyst Robert Moskow said the volume decline was disappointing.

Competitor Kraft foods (NYSE:KFT) is scheduled to report results 11/29.