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Campbell Beats, Guides in Line

Domestic soup sales are strong.
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Earnings rose 8% from a year ago in

Campbell Soup's


second quarter, beating estimates thanks to rising domestic soup sales.

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Campbell earned $254 million, or 61 cents a share, in the quarter, compared with $235 million, or 57 cents a share, last year. Sales rose 3% from a year ago to $2.28 billion. Analysts surveyed by Thomson First Call had been forecasting earnings of 59 cents a share on $2.28 billion in sales.

The company estimated full-year 2006 earnings at $1.72 to $1.75 a share. The consensus estimate is $1.75 a share.

In the second quarter, Campbell said pricing and sales allowances to retailers contributed 4% to the year-over-year sales improvement, while volume and mix contributed 1%. Currency translation reduced the growth rate by 2%. The second-quarter tax rate was 29.4%, compared with 31.7% a year ago.

Sales in Campbell's U.S. soup, sauces and beverages unit rose 6% from a year ago to $1.02 billion. Sales in the baking and snacking unit fell 1% to $429 million. Sales for international soup and sauces fell 4% to $483 million.

"From a strategic perspective, we continue to focus on long-term growth initiatives, including premium soups," the company said. "From an international perspective, we are not satisfied with our business performance -- especially in Europe, most notably the U.K., where we face an increasingly challenging competitive environment."