Campbell Soup's Adjusted 3rd-quarter Profit Rises
The Associated Press
05/21/09 - 04:58 PM EDT
EMILY FREDRIX
MILWAUKEE (AP) — Campbell Soup Co. said Thursday that its third-quarter profit fell sharply from last year, when it sold its Godiva Chocolatier brand, but its adjusted profit rose 3.6 percent even as its sales slumped.
The Camden, New Jersey-based company said it earned $174 million, or 49 cents per share in the three months that ended May 3, down from $532 million, or $1.40 cents per share a year earlier.
Excluding one-time items such as the sale of Godiva, the largest U.S. soup maker earned $171 million in this year's third quarter, or 48 cents a share, up from $165 million, or 43 cents per share a year ago.
Its revenue fell 10 percent to $1.69 billion. Volume and mix — the type of products people buy — fell 6 percent.
The earnings beat estimates though revenue fell short. According to Thomson Reuters, analysts expected profit of 42 cents per share on revenue of $1.79 billion.
The company said the strong dollar pushed its results down 4 cents per share. As the U.S. dollar gains strength, that weighs on international sales for U.S. companies, once the sales are translated back into American dollars. Campbell's expects this year's full-year results also to take a hit from the strong dollar, this time of about five percentage points.
Campbell's had planned to announce its earnings on Friday morning but released the results Thursday after the market closed. Shares of Campbell's fell 15 cents Thursday to close at $26.79. In after-hours trading, the shares rose 81 cents, or 3 percent, to $26.79.
The company said overall soup sales fell 2 percent to $808 million from $811 million in the quarter. Ready-to-serve soups fell 7 percent, which continues the trend of declining convenience soup sales, Campbell's said. That line includes soups in pre-filled microwavable bowls and cups.
The trends of consumers cutting their food budgets, trimming nonessentials and eating more at home during the recession helped Campbell's condensed soup sales, though. Those sales rose 2 percent in the quarter, with varieties used in cooking achieving strong gains.
Chief Executive Douglas Conant said in a statement that soup sales rose 6 percent in the first nine months of the year.
"Consumers continued to view soup as a simple, nourishing and affordable meal," he said. "In particular, condensed cooking soups provided strong growth, as our value marketing message resonated with consumers."
Sales of Prego pasta sauces and Pace Mexican sauces grew in the double digits, also benefiting from the eat-at-home trend.
The baking and snacking division saw revenue fall 14 percent to $431 million, including a hit of 9 percentage point from currency woes. Sales of Pepperidge Farm products like Goldfish crackers and Milano cookies rose in the double digits.
International soup, sauces and beverages posted a 26 percent drop in revenue to $297 million, including 16 percentage points due to currency fluctuations. The company said sales declined in Germany, France and Canada. Sales rose in Australia and Malaysia.
