Campbell Soup Adj Profit Tops View, But Revenues Miss

(RTTNews) - World's largest soup maker Campbell Soup Co. (CPB) reported Thursday adjusted earnings that surpassed analysts' expectations. Sales were up sharply as the company added new brands, but fell slightly short of the Street view.

The company also provided earnings and revenue growth guidance for the full-year 2014.

Campbell Soup recently added new brands through its acquisitions of Bolthouse Farms, Plum Organics and the Kelsen Group. These acquisitions have combined annualized sales of about $1 billion.

"Together, the actions under our dual mandate are reshaping our brand portfolio and shifting our center of gravity for a greater growth trajectory in the long term," President and CEO Denise Morrison said in a statement.

The Camden, New Jersey-based maker of ready-to-serve soups, pastas and sauces reported a net loss of $158 million or $0.50 per share for the fourth quarter, compared to net income of $127 million or $0.40 per share in the prior-year quarter.

Results from its struggling European simple meals business, which Campbell is in negotioations to sell, have been reported as a discontinued operation. Net loss from discontinued operations for the quarter was $275 million, or $0.87 per share.

Stripping out those items, adjusted net earnings for the quarter was $142 million or $0.45 per share, compared to $130 million or $0.41 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.42 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Sales for the quarter grew 13 percent to $1.72 billion, and adjusted sales increased 13 percent to $1.82 billion from $1.61 billion in the same quarter last year, but missed eleven Wall Street analysts' consensus estimate of $1.84 billion by a whisker. Organic sales increased 1 percent.

U.S. simple meals sales grew 7 percent, as well as global baking and snacking sales increased 3 percent, while sales at U.S. beverages decreased 4 percent, as well as international simple meals and beverages sales declined 7 percent from last year. Bolthouse and Foodservice sales soared 148 percent from a year ago.

Gross margin for the quarter declined 280 basis points to 36.2 percent from last year's 39.0 percent, due to cost inflation and the acquisition of Bolthouse Farms, which operates with a lower gross margin.

For fiscal 2013, the company reported net income of $458 million or $1.44 per share, lower than $774 million or $2.41 per share in the prior year. Excluding items, adjusted net earnings for the year was $836 million or $2.64 per share, compared to $783 million or $2.44 per share in the year ago.

Net earnings from continuing operations declined to $680 million or $2.17 per share from $724 million or $2.29 per share in the prior year. Excluding items, adjusted net earnings from continuing operations was $786 million or $2.48 per share, compared to $741 million or $2.31 per share in the year ago. Analysts expected the company to report earnings of $2.61 per share for fiscal 2013.

Net revenues for the full year increased 12 percent to $8.05 billion, and adjusted sales increased 11 percent to $8.58 billion from $7.71 billion in the previous year. Street was looking for full-year 2013 revenues of $8.60 billion.

Looking ahead to fiscal 2014, Campbell Soup expects adjusted earnings per share to grow 3 to 5 percent, on projected sales growth of 5 to 6 percent, both on a continuing operations basis. Street is currently looking for full-year 2014 earnings of $2.74 per share on annual revenues of $8.95 billion.

"Looking ahead, we expect continued growth in our U.S. Soup and Pepperidge Farms businesses. We remain focused on increasing sales from faster-growing segments in North America; driving innovation with the launch of more than 200 new products; expanding availability in multiple channels; expanding our packaged fresh offerings; and accelerating growth in markets like China, Indonesia, Malaysia and Mexico," Morrison added.

CPB closed Wednesday's regular trading session at $44.71, down $0.20 on a volume of 1.30 million shares. In the past 52-week period, the stock has been trading in a range of $34.28 to $48.83.