Heinz Doublespeak on Foreign Currency

HJ Heinz (HNZ) reported Q1 profits using an interesting format. “Constant currency.” In the headlines they lay claim to sales growing 4.5%, operating Income increasing 5.6%, and EPS rising 9.7% on a constant currency basis. Under their 2010 guidance they explain constant currency; as excluding the impact of currency, which cannot be predicted with consistency. So let’s not use it. That’s like predicting costs without taking into account commodity prices changing. Can you imagine a constant commodity. Sounds stupid. So why do it with currency. Heinz is not the only one doing it and it does sound stupid in other press releases also.

Drill down to SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS: ....specifically to Factors that could cause actual results to differ from such statements include, but are not limited to: ...and you will find that a major risk factor which they feel obligated to warn investors about is ...Currency valuations and interest rate fluctuations.

But when management pats themselves on the back they get to ignore it.