Campbell Soup Q3 Profit Edges Up, Cuts Full Year View

(RTTNews) - Soup maker Campbell Soup Co. (CPB) Monday said its third-quarter profit grew slightly from the prior year, and organic sales growth was short of expectations in a challenging consumer environment. Further, the company lowered its outlook for the year. The stock fell close to 7 percent in pre-market activity.

Net earnings attributable to Campbell improved to $184 million from $181 million in the previous year. Earnings per share rose to $0.58 from $0.57. Earnings per share from continuing operations totaled $0.53 last year.

The latest results included a pension settlement charge of $0.03 per share associated with a U.S. pension plan.

Adjusted net earnings per share attributable to the company was $0.62. On average, 15 analysts polled by Thomson Reuters expected earnings of $0.59 per share. Analysts' estimates typically exclude special items.

Net sales edged up to $1.970 billion from $1.962 billion in the prior year, and organic sales rose 1 percent. Analysts expected revenues of $2 billion.

Denise Morrison, Campbell's President and Chief Executive Officer, said, "While we delivered growth in third-quarter earnings, our organic sales growth of 1 percent reflected mixed performance and fell short of our expectations.''

The company said that despite increased promotional activities, it did not realize the expected lifts in a challenging consumer environment.

Sales for U.S. Simple Meals grew 7 percent to $672 million. Within the business, sales of U.S. Sauces increased 25 percent, with the acquisition of Plum Organics contributing 14 points of growth.

The company noted that U.S. Soup sales were comparable to a strong year-ago quarter, in which sales climbed 14 percent.

Bolthouse and Foodservice revenue improved 4 percent to $358 million. Sales increased 6 percent at Bolthouse Farms, driven by double-digit gains in premium refrigerated beverages and salad dressings.

Global Baking and Snacking sales edged down 1 percent to $564 million, despite increased promotional spending.

International Simple Meals and Beverages reported a 17 percent drop in sales at $186 million, with sales declines in Latin America, the Asia Pacific region and Canada, while sales of U.S. Beverages slipped 4 percent to $190 million driven by unfavorable volume and mix.

Citing the performance so far, the company lowered its guidance for full-year sales growth to approximately 3 percent from the previous outlook of 4 to 5 percent.

Adjusted earnings per share for the full year is expected to be at the low end of the previously announced guidance of 2 to 4 percent, or $2.53 to $2.58 per share. Analysts look for earnings of $2.53 per share on sales of $8.35 billion.

CPB, which closed at $45.12 on Friday, fell 6.9 percent in pre-market activity.