Campbell's Soup Earnings Decline Amid Drop In US Soup Sales

Published by: Mike Goldman on 23rd Nov 2010 | View all blogs by Mike Goldman
Campbell-Soup-logo.jpg
Campbell's Soup Earnings Decline Amid Drop In US Soup Sales

Campbell Soup Co. released its fiscal first-quarter results on Tuesday, reporting a drop in sales and earnings as consumers failed to respond to increased spending on promotions from the company.

The nation's largest producer of soups, Campbell's earned $279 million in the quarter, or 82 cents per share, down 8 percent from earnings of $304 million, 87 cents per share, in the same period a year ago.  The numbers just missed matching analysts' expectations from a recent Thomson Reuters survey.  The company's President and CEO, Douglas Conant, who has announced he will be stepping down next July, says the company lacks new products to draw people in, saying shoppers won't buy on price alone.

Shares of Campbell's fell 68 cents, or 2 percent, to $34.15 in early trading in Tuesday's session.  The stock has been in a range of $32.18 to $37.59 for the last twelve months.  The soup maker experienced a 1 percent dip in revenue in the quarter from $2.2 billion to $2.17 billion.  Economists had forecast $2.2 billion in quarterly revenue for the Camden, New Jersey-based company.

Campbell's launched a new $100 million ad campaign in September to promote its soup brands in the face of growing competition from other soup makers and producers of low-priced meals like frozen pizzas and entrees.  Sales of the company's condensed cooking soups did climb 7 percent, but their ready-to-serve soup sales fell 13 percent and condensed soups slipped 1 percent.  Overall, the company's US sales declined by about 5 percent.

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