Campbell Soup Co. (NYSE: CPB): Q3 Earnings Preview 2011

Campbell Soup Co. (NYSE: CPB), the world's largest soup company, is scheduled to release its fiscal third-quarter earnings before the opening bell on Monday, May 23, 2011. Analysts, on average, expect the company to report earnings of 52 cents per share on revenue of $1.80 billion. In the year ago period, the company reported earnings of 54 cents per share on revenue of $1.80 billion.

Campbell Soup Company, together with its subsidiaries, engages in the manufacture and marketing of branded convenience food products worldwide. The Company operates in four segments: U.S. Soup, Sauces and Beverages; Baking and Snacking; International Soup, Sauces and Beverages, and North America Foodservice. 

In the preceding fiscal-second quarter, the Camden, New Jersey-based company's net income was $239 million, or 71 cents per share, compared with $259 million, or 74 cents per share, in the year-ago quarter. Revenue slipped 1% to $2.13 billion from $2.15 billion. Analysts, on average, expected the company to report earnings of 83 cents per share on revenue of $2.20 billion. 

At its last earnings call in February, the company trimmed its fiscal 2011 outlook. Campbell said that it now expects fiscal 2011 earnings per share to decline 1 percent to 3 percent. Net sales are currently projected to be up 1 percent to down 1 percent for the period. Previously, the company had estimated earnings per share growth of 2 percent to 4 percent, and net sales growth of 1 percent to 3 percent for fiscal 2011.

According to the company, competitive pressure in the U.S. Soup, Sauces and Beverages segment is likely to prevail in the second half of the year. Therefore, growth in the second half of the year will be at more modest rates than previously anticipated and will come largely in the fourth quarter.

The processed and packaged goods sector is currently struggling through a balancing act between price-hikes and ceding market share to store-brands. As commodity prices surge, food makers are forced to either watch their margins shrink or attempt to pass the prices on to their consumers.

Sales at Campbell have declined in eight of the last 10 quarters as the company, which also makes Pepperidge Farm foods, V8 beverages and Prego sauces, struggled with intensified competition from rivals such as General Mills Inc. and lower-priced store brands. 

Food industry experts believe soup has been losing out to other meals that are just as simple to prepare, such as macaroni and cheese and frozen pizza. In November, company executives told investors they expect to see pressure on Campbell's profit margins from continued discounting in the fiscal second quarter. To counter that, the company said it would shift more resources to advertising from promotions.

The company lowered prices to stay competitive last year, but that didn't really help sales volume. Campbell is now going to move away from discounting in favor of more innovation and advertising. The company will debut "Slow Kettle" soups in late summer, he told the Journal. They are minimally processed with five flavors such as Southwest-style chicken chili that may interest younger buyers -- a weak point for the company.

Full Disclosure: None.

Campbell Soup Co.(NYSE: CPB): Q3 Earnings Preview

Campbell Soup Co.(NYSE: CPB), the world's largest soupmaker, is scheduled to release its fiscal third-quarter 2010 financial results before the opening bell on Monday, May 25, 2010. Analysts, on average, expect the company to report earnings of 51 cents a share on revenue of $1.80 billion. In the year ago period, the company posted earnings of 48 cents per share on revenue of $1.69 billion.

Campbell Soup Company, together with its subsidiaries, engages in the manufacture and marketing of branded convenience food products worldwide. The company operates through four segments: U.S. Soup, Sauces, and Beverages; Baking and Snacking; International Soup, Sauces, and Beverages; and North America Foodservice. With a 69 percent share of the U.S. wet soup market, Campbell sells almost three billion cans of soup every year.

In the preceding fiscal-second quarter, the Camden, New Jersey-based company reported net earnings of $259 million or $0.74 per share for the second quarter, higher than $233 million or $0.64 per share in the prior-year quarter. Revenue declined 2% to $2.20 billion from $2.25 billion in the previous year. Earnings from continuing operations for the quarter rose to $259 million or $0.74 per share from $229 million or $0.63 per share in the year-ago quarter. Revenue increased 1% to $2.15 billion from $2.12 billion in the same quarter last year. Analysts, on average, expected the company to post earnings of $0.74 per share on revenue of $2.23 billion. Gross margin percentage also grew 70 basis points to 40.5% from last year's 39.8%.

For fiscal 2010, Campbell Soup expects to report adjusted earnings per share year-over-year growth forecast in the range of 9% to 11% from the fiscal 2009 adjusted base of $2.21, implying earnings in the range of $2.41 to $2.45 per share. The company anticipates revenue growth guidance in the range of 2.5% to 3.5%. The growth forecast implies revenues between $7.78 billion and $7.85 billion.

The company plans to enhance more than 60% of its condensed line with product improvements, further expand its sodium reduction program, introduce more contemporary packaging, improve shelving systems and new marketing aimed at the simple meals category. The new and improved soups will be available at retail in August 2010. The moves are part of the company's effort to maintain its dominant position in the soup market and regain market share from rivals like General Mills Inc.'s Progresso and ConAgra Foods Inc.'s Healthy Choice. The company continued to grow in the economic downturn by focusing on the health trend, capitalizing on the rise in packed lunch occasions, and preparing to build its business in emerging markets. Like other packaged foods companies, Campbell Soup has benefited as consumers saved money by eating at home more often.

In terms of stock performance, Campbell Soup shares have gained more than 30 percent over the past year.

Full Disclosure: None.

Campbell Soup Co.(NYSE: CPB): Q2 Earnings Preview 2010

Campbell Soup Co.(NYSE: CPB), the world's largest soupmaker, is scheduled to release its fiscal second-quarter 2010 financial results before the opening bell on Monday, February 22, 2010. Analysts, on average, expect the company to report earnings of 73 cents a share on re.venue of $2.24 billion. In the year ago period, the company posted earnings of 65 cents per share on revenue of $2.12 billion.

Campbell Soup Company, together with its subsidiaries, engages in the manufacture and marketing of branded convenience food products worldwide. The company operates through four segments: U.S. Soup, Sauces, and Beverages; Baking and Snacking; International Soup, Sauces, and Beverages; and North America Foodservice. With a 69 percent share of the U.S. wet soup market, Campbell sells almost three billion cans of soup every year.

In the preceding fiscal-first quarter, the Camden, New Jersey-based company reported that its net income rose to $304 million or $0.87 per share, compared to $260 million or $0.70 per share in the year-ago quarter.On an adjusted basis, net income advanced 8% to $304 million from $281 million in the comparable quarter of the previous year. Adjusted per share earnings grew 14% to $0.87 from $0.76 per share in the three months ended November 2, 2008. Revenue declined 2% to $2.20 billion from $2.25 billion in the previous year. Analysts, on average, expected the company to post earnings of $0.81 per share on revenue of $2.28 billion. Campbell's gross margin was 41.9%, compared to 38.7% a year ago, primarily due to productivity improvements and pricing, net of promotional spending, in excess of cost inflation.

Recently, Campbell Soup Co. slashed its guidance for 2010 sales growth to a range of 2.5% to 3.5% from a range of 4% to 5%. Based on 2009 revenue of $7.6 billion, that implies sales of about $7.79 billion to $7.87 billion. The company said it still expects adjusted earnings before interest and taxes to increase between 6% and 7% and adjusted earnings per share to rise between 9% and 11% from $2.21 a share in 2009. It also announced a comprehensive plan to boost the performance of its condensed soup portfolio in the United States, a business that generated more than $1 billion in net sales in fiscal 2009. Campbell plans to enhance more than 60 percent of its condensed line with product improvements, further sodium reduction, more contemporary packaging, improved shelving systems and new marketing aimed at the simple meals category.

The moves are part of the company's effort to maintain its dominant position in the soup market and regain market share from rivals like General Mills Inc.'s Progresso and ConAgra Foods Inc.'s Healthy Choice. In a report last month, research firm Mintel International said Campbell's sales to stores other than Wal-Mart fell 2.2 percent from 2008 to 2009 as some shoppers switched to cheaper store brands. Campbell is still the largest player in the soup market, accounting for 47 percent of sales. President and CEO Douglas Conant said in a statement that the company plans to get more aggressive on the positioning of its ready-to-serve products. To that end, Campbell plans to roll out a new advertising campaign that show consumers how soup and dishes made with soup can be a "simple meal." The changes are to show up in August.

The company continued to grow in the economic downturn by focusing on the health trend, capitalizing on the rise in packed lunch occasions, and preparing to build its business in emerging markets. Like other packaged foods companies, Campbell Soup has benefited as consumers saved money by eating at home more often.The soupmaker is also poised to benefit from an uptick in consumer spending and a particularly cold U.S. winter season.

The company's stock currently trades at a forward P/E (fye 02-Aug-11) of 12.74 and PEG Ratio (5 yr expected) of 1.47. In terms of stock performance, Campbell Soup shares have gained 11 percent over the past year.

Full Disclosure: None.