Campbell Soup Co has booked a drop in first-half profits, hurt by cost inflation and lower volumes.

For the six months to 29 January, net earnings slid by 9.2% to US$470m. EBIT dropped 7.2% to $745m. The US food maker blamed cost inflation and lower volumes for the decline, which was partly offset by higher selling prices and productivity savings.

Net sales dropped 1% to $4.27bn, as a result of increased promotional spend and currency fluctuations.

In the second quarter, net earnings slumped 14.2% to $205m, while EBIT slid 8.3% to $329m. Sales dropped 1% to $2.11bn.

"We are executing a strategic turnaround in an environment of weak volume and high inflation across the food industry," said Campbell president and CEO Denise Morrison. "But we continue to make progress against our key growth strategies. In the second half, we expect improved trends in our beverages and Australian businesses, and in US soup, we will begin to cycle our change in discounting, providing an opportunity for better sales performance."

Campbell reiterated its fiscal 2012 guidance of net sales growth of between 0-2%, a decline in adjusted EBIT of between 9% to 7% and a decline in adjusted EPS of 7-9%, in the range of $2.35 to $2.42, from the 2011 adjusted base of $2.54.