Campbell Soup Q4 Adj Profit Meets View, But Sales Miss; Issues Weak 2015 Outlook

(RTTNews) - World's largest soup maker Campbell Soup Co. (CPB) reported Monday a profit for the fourth quarter compared to a loss last year, which was weighed down by hefty loss from discontinued operations. The results also reflect the benefit of an additional week in the latest quarter.

Adjusted earnings per share from continuing operations met analysts' expectations, while quarterly sales missed their estimates. The company also provided earnings guidance for full-year 2015 below Street view.

The Camden, New Jersey-based maker of ready-to-serve soups, pastas and sauces reported net income of $137 million or $0.43 per share for the fourth quarter, compared to a net loss of $158 million or $0.50 per share in the prior-year quarter.

Earnings from continuing operations for the quarter grew to $135 million or $0.43 per share from $115 million or $0.37 per share last year.

Excluding items, adjusted net earnings from continuing operations was $155 million or $0.49 per share, compared to $136 million or $0.43 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude special items.

Sales from continuing operations for the quarter increased 7 percent to $1.85 billion from $1.72 billion in the same quarter last year, but missed twelve Wall Street analysts' consensus estimate of $1.87 billion. Meanwhile, organic sales declined 2 percent.

The latest quarter benefited from an additional week, which contributed an estimated $0.08 to earnings per share from continuing operations and 7 percent to sales.

U.S. simple meals sales increased 5 percent, global baking and snacking sales improved 10 percent and sales at U.S. beverages grew 6 percent from last year.

International simple meals and beverages sales edged up 1 percent, as well as Bolthouse and Foodservice sales were up 11 percent from a year ago.

Gross margin for the quarter contracted 210 basis points to 34.1 percent from last year's 36.2 percent, due to increased supply chain costs, cost inflation and higher promotional spending, partly offset by productivity improvements.

Looking ahead to fiscal 2015, Campbell Soup now expects adjusted earnings to grow 0 to 2 percent to $2.45 to $2.50 per share on projected sales growth of 1 to 2 percent, both on a continuing operations basis. Street is currently looking for full-year 2015 earnings of $2.57 per share on annual revenue growth of 0.7 percent to $8.35 billion.

"Looking ahead, we plan to deliver modest growth in fiscal 2015, despite a consumer environment that is likely to remain challenging. As we announced at our July 21 Investor Day, we expect fiscal 2015 growth to be below our long-term targets for sales and earnings," President and CEO Denise Morrison said.

The company noted that it intends to make improvements in core businesses and drive innovation across the company with the launch of more than 200 new products. It plans to deliver sales growth in U.S. Simple Meals, including U.S. Soup, and in Pepperidge Farm, by optimizing all the drivers of demand.

"As always, we will be relentless in managing our costs and margins to improve profit performance. We're confident that Campbell is on the right path, and we are committed to executing our strategy to deliver sustainable, profitable net sales growth," Morrison added.

CPB closed Friday's regular trading session at $44.54, up $0.25 on a volume of 0.89 million shares. In the past 52-week period, the stock has been trading in a range of $38.30 to $46.67.