* Q1 EPS ex-items $0.77 vs Wall St view $0.76
* Sales up 3 percent to $2.25 billion
* Forex to hurt 2009 sales, EPS growth
* Shares down 8 pct
(Recasts first sentence, adds analyst comment, updates share
By Aarthi Sivaraman
NEW YORK, Nov 24 Campbell Soup Co (CPB.N) warned
on Monday that a stronger U.S. dollar would hurt full-year
earnings, sending shares down 8 percent after the foodmaker's
quarterly profit beat Wall Street expectations by a penny.
Campbell and other leading foodmakers have benefited as a
contracting U.S. economy forces more consumers to stay at home
and prepare more of their own meals. Food companies have also
managed to raise prices for their products to offset higher
But Campbell said that a stronger dollar, which lowers the
value of sales overseas, would reduce fiscal 2009 sales and
earnings growth rates by about 5 percentage points each.
The world's largest soup maker derives about 25 to 30
percent of its sales from outside the United States.
Campbell shares were down $2.90 or 8 percent at $33.37, off
an earlier low at $33.02, on the New York Stock Exchange on
Stifel Nicolaus analyst Christopher Growe said there may
still be some downside to Campbell's stock, which touched a year
high of $40.85 on Oct. 1, as food stocks were seen as a safer
bet amid growing economic worries.
The growth in Campbell's U.S. soup sales, though strong, had
come against easy comparisons and produced relatively little in
terms of profit growth during the quarter, Growe noted. The
reduction in Campbell's fiscal 2009 outlook was not a big
surprise, he said.
STRONG U.S. SOUP SALES
Campbell posted a net profit of $260 million, or 71 cents a
share in the first quarter ended Nov. 2, compared with $270
million, or 70 cents a share, a year earlier.
Excluding an unrealized loss on commodity hedges and costs
tied to restructuring, the company earned 77 cents a share,
beating analysts' average forecast of 76 cents a share,
according to Reuters Estimates.
Total sales for Campbell, known for its namesake soups, and
other brands such as Prego pasta sauce and Pepperidge Farm
cookies, rose 3 percent to $2.25 billion.
Total U.S. soup sales rose 12 percent, with condensed soup
sales -- to which consumers add water -- rising 14 percent.
Condensed soups are more profitable for Campbell than
Campbell, which competes with General Mills Inc's (GIS.N)
Progresso brand and others in the soup aisle, has introduced
several new products over the past year. They include the Select
Harvest label of soups that emphasize ingredients like
farm-grown vegetables and "wholesome grains" to attract
consumers seeking healthy food options.
Chief Executive Douglas Conant said in a statement that he
was "encouraged" by the early results for its Select Harvest and
V8 ready-to-serve soups.
In September, Campbell had said it expected 2009 sales to
grow more than its 3 to 4 percent target excluding the impact of
one fewer week in the fiscal year and divestitures.
It had forecast an adjusted earnings increase of 5 to 7
percent from a base of $2.09 a share, a forecast that equals
about $2.19 to $2.23 a share.
Analysts, on average, expected it to earn $2.21 per share.
(Additional reporting by Brad Dorfman; editing by Dave
Zimmerman and Matthew Lewis)