CAMDEN (dpa-AFX) - Campbell Soup Co. (CPB) reported Tuesday a decline in first-quarter profit, as price increases could not offset the impact of cost inflation and lower volumes. Earnings per share, however, topped Street projections. For fiscal year 2012, the maker of ready-to-serve soups, pastas and sauces still projects a decline in earnings.
First-quarter net earnings attributable to the company decreased to $265 million from $279 million last year. However, earnings per share remained unchanged at $0.82, benefiting from a reduction in shares outstanding from the company's share repurchase programs.
On average, 16 analysts polled by Thomson Reuters expected earnings of $0.79 per share for the quarter. Analysts' estimates typically exclude one-time items.
Quarterly net sales edged down 1 percent to $2.16 billion from $2.17 billion a year ago, and missed Wall Street analysts' estimated revenues of $2.21 billion.
The company attributed the decline in sales to a 5 percent drop in volume and mix, and a 1 percent decline in increased promotional spending, partly offset by 4 percent growth in price and sales and a 1 percent increase due to currency.
Segment-wise, sales for U.S. Simple Meals dropped 3 percent mainly due to lower U.S. Soup sales, as lower volumes were partly offset by higher selling prices. The company noted that its efforts to stabilize U.S. Soup profitability are on track.
Sales for Global Baking and Snacking segment grew 4 percent and North America Foodservice sales rose 6 percent. Meanwhile, International Simple Meals and Beverages sales fell 3 percent and U.S. Beverages sales declined 3 percent.
In U.S. Beverages, the company faced increased inflation, a weaker category and intensified competition, with new entrants in both 100-percent vegetable juice and fruit and vegetable blends.
Gross margin fell to 39.5 percent from 41.2 percent a year ago, primarily due to cost inflation and negative mix, partly offset by higher selling prices and productivity improvements.
Denise Morrison, Campbell's President and CEO, said, 'We're making steady progress on implementing our new strategies. Our overall first-quarter performance was in line with our expectations, although the composition of our results was mixed. U.S. Simple Meals, Pepperidge Farm and North America Foodservice met or exceeded expectations; U.S. Beverages and International did not.'
Looking ahead, for fiscal 2012, Campbell Soup still expects adjusted earnings of $2.35 to $2.42 per share, representing a decline between 7 and 5 percent from the fiscal 2011 adjusted base of $2.54 per share. Also, the company expects net sales growth to be between 0 and 2 percent.
Analysts expect the company to report earnings of $2.37 per share on revenues of $7.83 billion for the full year.
Morrison added, 'As we've previously stated, fiscal 2012 will be a year of investment as we establish the foundation for the next era of profitable growth at Campbell.'
CPB closed Monday's regular trading session at $33.61, down $0.04 or 0.12 percent.
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