Campbell Soup Q2 Results Meet Estimates

(RTTNews) - Campbell Soup Co. (CPB) Wednesday said second-quarter profit declined from the previous year, amid a slide in sales. However, both adjusted earnings and sales met Wall Street estimates, and the company backed its 2015 forecast issued on February 12.

Attributable profit fell to $207 million from $325 million in the prior year. Earnings per share dropped to $0.66 from $1.03.

Earnings per share from continuing operations declined to $0.66 from $0.74. Adjusted earnings from continued operations totaled $0.76 per share last year.

On average, 15 analysts polled by Thomson Reuters expected earnings of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales slipped 2 percent to $2.234 billion from $2.281 billion in the prior year. Analysts expected revenues of $2.23 billion.

Organic sales were comparable with the prior year with favorable volume and mix and higher selling prices, offset by increased promotional spending.

Gross margin declined 3.1 percentage points, due to cost inflation, higher supply chain costs and increased promotional spending, partly offset by productivity improvements.

Segment-wise, in U.S. Simple Meals, sales decreased 3 percent in the quarter to $867 million, as soup sales decreased 6 percent, primarily due to movements in retailer inventory levels, including the earlier holiday shipments that benefited the prior quarter.

Global Baking and Snacking generated sales of $640 million, comparable with last year. Within the business, sales of Pepperidge Farm products increased as volume gains were partly offset by higher promotional spending.

Sales decreased 4 percent in U.S. Beverages to $169 million, amid declines in V8 V-Fusion beverages.

Campbell's President and Chief Executive Officer Denise Morrison said, "Looking at the first half, we were encouraged by our 2 percent organic sales growth in a difficult operating environment...Although we have robust plans in the second half to mitigate our gross margin issues, we don't expect to offset the impact of the margin pressures that we experienced in the first half."

Further, the company backed its forecast for 2015, issued earlier this month. Campbell expects adjusted earnings of $2.32 to $2.38 per share, and a year-over-year change of -1 to +1 percent in sales. This guidance is based on an adjusted 52-week 2014 base. Analysts expect the company to report fiscal 2015 earnings per share of $2.39.

CPB closed nearly unchanged at $47.22 on Tuesday.