DOW JONES NEWSWIRES
Campbell Soup Co. (CPB) posted a 22% drop in fiscal fourth-quarter profit as it wrote down European trademarks and bakery sales sputtered.
The maker of soups, Pepperidge Farm cookies and V-8 juice also gave a cautious view for the new year - projecting per-share earnings, excluding items, growing 5% to 7% with sales up 3% to 4%. Analysts polled by Thomson Reuters were expecting earnings, excluding items, increasing 7% to $2.31 a share and revenue rising 4% to $7.88 billion.
Still, shares rose 1.9% premarket to $33.76 as the latest quarter's results edged analysts' expectations.
Campbell said that the new year's view matched the company's long-term growth targets and that cost-cut benefits will be partially offset by increased pension costs.
Although soup is a consumer staple and in demand as shoppers shift more food purchases to grocery stores, Campbell's sales have been pressured by higher prices. In response, it has launched new products and stepped up marketing efforts while pushing further into its newer markets like Russia and China.
Profit for the quarter ended Aug. 2 fell to $69 million, or 20 cents a share, from $89 million, or 24 cents a share, a year earlier. Excluding items such as the trademark write-down, earnings rose to 30 cents a share from 26 cents a share.
Net sales fell 11% to $1.53 billion, with foreign-currency impacts accounting for 4 percentage points of the decline. The latest quarter was also one week shorter than the prior-year period.
Analysts, on average, expected earnings, excluding items, of 26 cents a share on revenue of $1.52 billion.
Gross margin rose to 41.6% from 38.7%, helped by hedges and lower marketing costs.
Revenue at Campbell's U.S. soup, sauces and beverages business fell 3%, while the bakery and snacks segment recorded a 13% decline.
-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com