CPB 2009 Q3 Earnings

Following the closing bell on Thursday May 21, the world’s largest soup maker, Campbell Soup Co. (CPB), made it known that the company’s profits during the recent quarter plunged substantially compared to the pervious year’s earnings as the exchange rate affected overall per share earnings by $0.04.

For the 3Q, Campbell recorded a net profit of $174M, or $0.49 per share during the period, in contrast to last year’s profit of $532M, or $1.40 per share, a decline in income of more than 67%. With an increase in the value of the Dollar, Campbell’s bottom-line was affected greatly, as has many other companies that have substantial market presence in the international markets.

During the recent quarter, Campbell divested their remaining stake in the Godiva Chocolatier brand, which affected the company’s overall earnings. Excluding these charges, Campbell’s adjusted earnings for the period would have come in at $171M, or $0.48 per share, compared to last year’s 3Q profit of $165M, or $0.43 per share, which also excluded certain one-time charges.

"We delivered strong earnings growth this quarter. Reflecting our previous pricing actions and ongoing productivity improvements, gross margin performance improved versus the prior year, as expected. Following increased spending in the first half to launch new products, we reduced marketing expenses, as planned, particularly in U.S. Soup," commented Douglas Conant, Campbell's President and CEO.

As for the company’s overall sales totals during the period, Campbell witnessed their revenues drop more than 10%, falling from $1.88B to $1.69B. Analysts, on average, were looking for the company to post quarterly earnings of $0.42 per share on total revenues of $1.79B.

Sales within the U.S. Soup, Sauces and Beverages unit retreated during the quarter, falling from $811M the year before to $808M this year. However, sales of the company’s condensed soups advanced more than 2%, but saw revenues from ready-to-serve soups fall off by just over 7%.

"Consumers continued to view soup as a simple, nourishing and affordable meal," Conant went on to add. "In particular, condensed cooking soups provided strong growth, as our value marketing message resonated with consumers."

Sales from their Baking and Snacking division slipped 14% from a year ago to $431M, while revenues from Pepperidge Farm products, including Goldfish snacks, posted double-digit increases. In the overseas markets, International Soup, Sauces and Beverages unit’s sales dropped 26% from last year to $297M, as sales declined in Germany, France and Canada, but managed to post gains in Australia and Malaysia.

Through the fist three-quarters of the year thus far, Campbell has been able to record net income of $667M, or $1.85 per share, down from last year’s nine-month tally of $1.08B, or $2.79 per share. On an adjusted basis, excluding one-time charges, net income was $686M, or $1.90 per share, versus $701M, or $1.82 per share from a year ago.

Overall sales for the nine-month period declined from $6.28B to $6.06B, a decrease of more than 3% year-over-year.

Looking ahead, Campbell currently is projecting yearly earnings to exceed their previous forecast of a 5% to 7% increase over last year’s tally. In 2008, Campbell posted annual earnings per share of $2.09. With those figures taken into account, the previous earnings range by Campbell was between $2.19 and $2.23 per share. Analysts currently anticipate the company to post yearly earnings of $2.12 per share.

Over the course of a year, shares of Campbell Soup Co. have ranged within a broad spectrum, trading as high as $40.85 per share and as low as $24.63 per share. During the final trading session of the week, shares of CPB ended the day in the green and closed the session just over $27 per share.

By BetterTrades