Campbell Soup's Profit Drops

The company cites a one-time charge for the impairment of goodwill.
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Campbell Soup

(CPB) - Get Report

reported a fall in quarterly earnings Wednesday, citing a one-time charge for the impairment of goodwill.

The Camden, N.J.-based company, which makes a wide variety of canned foods, posted first-quarter net income of $161 million, or 39 cents a share, down from $171 million, or 42 cents a share, in the year-earlier period.

Excluding unusual items, the company said it earned $192 million, or 47 cents a share. Analysts, on average, were expecting Campbell to earn 44 cents, according to research firm Thomson Financial/First Call.

Total revenue for the quarter fell to $1.71 billion from $1.73 billion, falling short of analysts' consensus estimate of $1.78 billion. "We are not satisfied with this top-line performance, particularly in U.S. condensed soup," the company said in a press release.

Sales at its North American soup business dropped 7% to $746 million, reflecting an 8% decline in U.S. condensed soup. However, its biscuits and confectionary businesses, which includes Pepperidge Farm, Arnott's and Godiva Chocolatier, achieved 8% sales growth.

Looking ahead, Campbell said it remains comfortable with its previous guidance for fiscal 2003, which calls for a net profit of $1.47 a share, excluding charges. Analysts are projecting the company will earn $1.46 a share. "We fully expect our U.S. soup performance to improve for the remainder of fiscal 2003 as we begin to realize substantially more of the impact of our marketing and product quality investments across our top product lines, particularly condensed soup," it said.

The shares, which hit a 52-week low of $19.65 in the previous session, were up $2.03, or 10.5%, to $21.86 in recent trading.