New Jersey-based Campbell Soup Company has issued an upbeat outlook on the back of increased second quarter earnings, which rose to US$284m from $239m in the prior year.
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The company’s net sales rose 4% to $2.3bn, with its soup meals and baked snacks categories both making ground.
The company said that earnings per share from continuing operations for the quarter were $0.72, compared with $0.58 in the year-ago period. Earlier this month (8 February), Campbell entered into an agreement with the State of New Jersey and the City and County of Camden to invest up to $72m in the expansion of its corporate headquarters.
Sales for the group’s US soup, sauces and beverages units were $1.028bn for the quarter, up 1% compared with a year ago, while baking and snacking sales were $454m, up 6% compared with a year ago.
For the first half, earnings from continuing operations were $553m compared to $525m a year earlier, while earnings per share were $1.38 compared to $1.27 in the prior period. Net sales rose 6% to $4.4bn.
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By GlobalDataThe current year included a $14m gain from the sale of Campbell’s idle Pepperidge Farm facility.
Campbell’s president and CEO Douglas Conant said: “We’re off to a strong start in fiscal 2007. For the first half, our US soup business delivered strong results with solid sales growth and enhanced profitability.
“Sales increased 4% with solid gains in condensed, ready-to-serve, and broth. We are encouraged by the early performance of our lower sodium soups, featuring natural sea salt. Initial trial and repeat purchases of these products have exceeded our plans and they are contributing to our growth. Despite a modest decline in US soup sales during the second quarter, we are very satisfied with the performance of this business.
“Beyond US soup, we are especially pleased with the performance of our Pepperidge Farm, Arnott’s, and US beverage businesses in the first half. Our strategic growth platforms of simple meals and baked snacks continue to gain momentum in the marketplace.”
The company increased its forecasted fiscal 2007 EPS growth from continuing operations from a range of 5 to 7% to a range of 10 to 12%.
Following the results announcement, reports have circulated suggesting that the US soup company is planning expansion in Russia and China, two of the world’s largest soup markets. It is understood that the company plans to begin testing these markets in fiscal 2008, which begins in July.
The positive outlook gave shares a boost on the New York Stock Exchange on Friday (16 February), with stock rising from an opening price of $40.82 to close at $42.29.
