CAMDEN (dpa-AFX) - Campbell Soup Co. (CPB) on Friday reported a profit for the third quarter that was flat with last year, reflecting lower sales and one-time charges. However, adjusted earnings beat analysts' expectations, while sales missed their estimates.
Looking ahead to fiscal 2015, the company now forecasts sales at the lower end of its guidance range and earnings at the higher end of its range.
Campbell's President and CEO Denise Morrison said, 'In the third quarter, gross margin improved and adjusted EBIT and EPS were better than expected. Sales declined, primarily due to unfavorable currency and the impact of retailer inventory movements on our U.S. soup business.'
Net earnings attributable to Campbell Soup for the third quarter were $182 million or $0.58 per share, compared to $184 million or $0.58 per share in the year-ago period.
The latest quarter's results include an after-tax impact of restructuring charges and implementation costs totaling $11 million, or $0.04 per share.
Adjusted earnings per share from continuing operations for the quarter were $0.62, the same as in the prior-year period. On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 4 percent to $1.90 billion from $1.97 billion in the prior-year quarter, primarily due to the negative impact of currency translation. Analysts' consensus revenue estimate was $1.93 billion.
Organic sales declined 1 percent with lower volume, partly offset by lower promotional spending and higher selling prices.
Gross margin expanded 160 basis points from the year-ago period to 35.9 percent, reflecting productivity improvements, lower promotional spending and higher selling prices. These were partly offset by cost inflation and other supply chain costs.
Segment-wise, in U.S. Simple Meals, sales decreased 6 percent in the quarter to $630 million as soup sales decreased 10 percent on volume declines. This was partly offset by lower promotional spending and higher selling prices.
Global Baking and Snacking sales of $555 million declined 2 percent from last year and includes a negative impact of 7 points from currency translation. Within the business, sales of Pepperidge Farm products increased.
Sales decreased 2 percent in U.S. Beverages to $187 million, amid declines in V8 V-Fusion beverages.
Bolthouse and Foodservice segment sales declined 1 percent to $353 million, reflecting volume declines in Bolthouse Farms carrots and natural ingredients.
International Simple Meals and Beverages sales declined 6 percent in the quarter to $175 million and includes a 12-point negative impact of currency translation.
Looking ahead to fiscal 2015, Campbell narrowed its previously-announced guidance ranges.
The company now expects sales at the lower end of the guidance range of 1 percent decline to 1 percent increase and adjusted earnings per share closer to the higher end of the range of $2.32 to $2.38 per share.
The company forecasts full-year adjusted EBIT closer to the favorable end of the range of a 7 to 5 percent decrease.
Analysts expect the company to report full-year earnings of $2.35 per share on 1.7 percent decline in revenues to $8.13 billion.
CPB closed Thursday's trading at $46.93. In Friday's pre-market activity, the stock is up $0.76 or 1.62 percent to $47.69.
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