* 4th-qtr adj. earnings/share $0.45 vs est $0.42
* Total sales up 13 pct, misses estimates
* Soups sales rise 4 pct vs 9 pct yr-ago
* Sees soups as 1/3rd of sales in 2014 vs 40 pct in 2012
* Shares down 2.3 pct
By Siddharth Cavale
Aug 29 Campbell Soup Co, the world's
largest soup maker, reported quarterly revenue that fell short
of analysts' expectations as sales in its core U.S. soup
business slowed, sending its shares down 3 percent.
Under a turnaround effort led by Chief Executive Denise
Morrison, the company has been revamping its offerings with new
varieties of soups and sauces, and improved advertising as it
looks to reverse several seasons of weak soup sales.
While these actions have helped sales for the past few
quarters, the company warned that the new launches and marketing
would pressure profit growth in the current quarter.
Growth in its U.S. soups business eased to 4 percent in the
fourth quarter, from the 9 percent it clocked a year earlier and
the 14 percent last quarter.
Campbell, which also sells Prego pasta sauces and Pepperidge
Farm cookies, is trying to move away from its traditional soup
business and into fast-moving perishable goods.
"We expect soup to account for about one-third of our sales
(in fiscal 2014) versus more than 40 percent in fiscal 2012,"
Morrison said on a conference call after the company reported a
better-than-expected profit for the quarter ended July 28.
Morningstar analyst Erin Lash said she was impressed with
the growth in the soup business in the quarter which came during
the summer and against tough comparisons. She has a "hold"
rating on the company's stock.
Over the past year, Campbell has bought Bolthouse Farms,
which makes refrigerated salad dressings and baby carrots; Plum
Organics, which makes baby food; and cookie maker Kelsen as it
looks to grow its fast-moving perishable goods business.
Though quarterly sales rose 13 percent to $1.82 billion
helped by such deals, it fell short of analysts' estimates of
$1.84 billion, according to Thomson Reuters I/B/E/S.
The shortfall was also due to weak U.S. drinks business
which fell for the fourth straight quarter as its V8 vegetable
juice faced stiff competition from energy drinks and packaged
The Camden, New Jersey-based company has earmarked some
European businesses for sale and excluding these operations,
total sales from continuing operations were $1.72 billion in the
quarter. Organic sales rose 1 percent.
Campbell said it expects sales from continuing operations to
grow 5 to 6 percent in fiscal 2014. Adjusted earnings are
expected to grow 3 to 5 percent.
Fourth-quarter adjusted earnings rose 9 percent to $142
million, or 45 cents per share, beating analysts' estimates of
42 cents per share. Earnings benefited from a lower tax rate of
22.3 percent, down from 30.3 percent, a year earlier.
The company's shares were down 2.9 percent at $43.68 in
afternoon trade on the New York Stock Exchange on Thursday.