Campbell Soup Co (CPB.N) reported higher-than-expected quarterly earnings and raised its full-year forecast on Monday as strong soup sales more than offset falling drink sales.
The robust results were a sign that a turnaround plan led by Chief Executive Denise Morrison was working. The plan includes revamping Campbell's offerings with new soups and sauces and improved existing lines after several weak soup seasons.
The company has also signed a deal to expand in Mexico and bought Bolthouse Farms, which makes refrigerated salad dressings and baby carrots.
Morrison said the company was still in the early stages of her plan.
Net income rose to $181 million, or 57 cents per share, in Campbell's fiscal third quarter ended April 28, from $177 million, or 55 cents per share, a year earlier.
Excluding items, profit was 62 cents per share. On that basis, analysts, on average, expected 56 cents per share, according to Thomson Reuters I/B/E/S.
Net sales rose 15 percent to $2.09 billion, boosted by the acquisition of Bolthouse. Analysts expected $2.05 billion. Campbell also sells Prego pasta sauces, Pepperidge Farm cookies and V8 vegetable juices.
Sales rose 11 percent in its U.S. simple meals business, and were up 5 percent in the global baked goods business, and 2 percent in the international simple meals and drinks business.
Sales fell 5 percent in the U.S. drink business.
The company forecast full-year earnings of $2.58 to $2.62 per share, up from a prior outlook of $2.51 to $2.57. It said sales growth should be at the upper end of its range of 10 percent to 12 percent.
Shares dipped 0.7 percent to $47.31 after rising as much as 2.5 percent in early trading.
(Reporting by Martinne Geller in New York; Editing by Gerald E. McCormick and Jeffrey Benkoe)