Aug. 15 (Bloomberg) -- H.J. Heinz Co., the world's biggest ketchup maker, said first-quarter earnings rose more than analysts anticipated on new products and higher European sales, causing the shares to increase the most in more than a year.

The company spent 25 percent more on marketing to promote healthier products in the U.S. and U.K following pressure last year from billionaire investor Nelson Peltz to boost sales. Peltz was re-elected to the board today at Heinz's annual meeting.

``It suggests that their strategy is working, and you are seeing it manifest in the numbers, where it counts,'' said Matthew Kaufler, who helps manage $2.6 billion, including Heinz shares, at Clover Capital in Rochester, New York.

Profit was 62 cents to 63 cents a share in the three months through Aug. 1, the Pittsburgh-based company said today in a statement. Analysts estimated 55 cents, the average of nine projections in a Bloomberg survey. Heinz expects annual profit to be ``near the top'' of its forecast of $2.54 to $2.60 a share.

Sales increased 9 percent in the quarter, led by ketchup, beans and soup. Heinz said its international divisions performed ``extremely well.'' The company also benefited from currency gains from a weaker U.S. dollar.

Heinz rose $1.18, or 2.8 percent, to $43.75 at 4:02 p.m. in New York Stock Exchange composite trading. It was the biggest increase since May 2006. The stock dropped 2.8 percent this year after climbing 33 percent last year.

New Products

The company introduced about 100 new products in the past 12 months, including Big Eat canned beans and pasta meals in the U.K. and Smart Ones Anytime Selections frozen meals in the U.S. The company plans to add 200 items in the year through April.

Heinz, like its peers in the food industry, is facing ``unprecedented'' commodity price increases, with sweeteners, packaging, tomatoes, potatoes and meat rising, Chief Executive Officer William Johnson said today at the annual meeting.

``Everything is better at this company after years of underperformance,'' Robert Moskow, an analyst at Credit Suisse in New York who rates the shares ``outperform,'' wrote in a note today. The company is finding it easier to raise prices, he said.

Heinz will report more detailed results on Aug. 24.

Earlier today, Nestle SA, the world's largest food company, reported first-half profit that beat analysts' estimates and said full-year revenue will exceed forecasts as the company increases prices of Dreyer's ice cream and Friskies pet food.

Sara Lee Corp., the maker of Ball Park hot dogs, reported fourth-quarter profit and revenue that climbed more than analysts predicted after extra advertising spurred sales of coffee and Jimmy Dean breakfast foods.

Selling Units

Heinz has been selling slower-growing units in Europe, where it was losing market share to stores' house brands. Heinz closed 16 plants last year and four this year as part of a two- year strategy to trim spending.

The company plans to increase marketing by $30 million to $40 million in the year through April, Heinz executives said in May.

Peltz, whose Trian Fund Management LP owns about 5.7 percent of Heinz's shares, began a campaign in March 2006 urging the company to trim $575 million in annual costs, increase marketing and sell assets to raise the share price.

Peltz and Michael Weinstein, the former chief executive officer of Snapple Beverage Corp., were elected to the board in September from a slate of five dissident investors. Weinstein was also re-elected today.

To contact the reporters on this story: Josh Fineman in New York at jfineman@bloomberg.net.

Last Updated: August 15, 2007 17:52 EDT