Campbell Soup 2nd-quarter profit climbs, but sales in US soup market decline

Monday, February 22, 2010

Campbell Soup 2Q profit up; US soup sales fall

HADDONFIELD, N.J. — Campbell Soup Co.’s second-quarter profit rose on cost controls and favorable exchange rates even as U.S. soup sales waned.

The world’s largest soup maker said Monday that earnings climbed 11 percent to $259 million, or 74 cents per share.

Campbell, whose products also include V8 juices, and Prego sauces, says sales increased 1 percent to $2.15 billion. U.S. soup sales fell 8 percent.

Earnings met Wall Street expectations. But Campbell’s revenue was short of an expected $2.23 billion.

It was the third straight quarter the company’s profits rose over the year-ago period despite lower sales. After more than a year of high inflation for ingredients and packaging materials, the company has found more stability in those prices over the past three quarters.

The company has stressed lower spending and last week laid out a plan to do even more to control soup-making costs by using more common bases and dicing vegetables fewer ways. Last week Campbell cut its full-year sales outlook but maintained its full-year earnings outlook.

The company, based in Camden, N.J., has benefited as consumers eat at home more in the weak economy but has been hurt by increased price competition in some parts of its business.

It said sales of condensed soups — which have high profit margins — were flat. Ready-to-serve sales were down. But sales rose for soups used in cooking, such as cream of mushroom.

The company reported higher sales for its Pepperidge Farm Goldfish crackers — the company has been rolling out new varieties of the kid favorite— and Prego pasta sauce. Sales of Pace Mexican sauce and Pepperidge Farm cookies fell.

For the year to date, the company has earned $563 million, or $1.61 per share, on sales of $4.36 billion — up from earnings of $493 million, or $1.34 per share, on sales of $4.37 billion in the first half of fiscal 2009.

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