US food group Campbell Soup Company has posted net earnings for the first quarter of US$291m, or $0.72 per share, down from $302m, or $0.73 a share in the first quarter of last year which was boosted by a $47m tax benefit.
Earnings per share from continuing operations for the first quarter fell to $269m, or $0.66 per share, from $286m, or $0.69 a share, in the corresponding period last year.
Both earnings and earnings per share in the year-ago period included several items that affected the comparability of results from continuing operations, the company said. After factoring in the items that impact comparability, adjusted earnings from continuing operations in the first quarter of 2006 would have been $269m, against $226m in the period a year ago, Campbell reported.
The company posted an 8% increase in sales for the quarter to $2.153bn. Campbell said volume and mix added 4%, price and sales allowances added 2% and a decrease in promotional spending contributed a further 1%, while currency factors also added 1%.
Douglas R. Conant, Campbell’s president and CEO, said: “We achieved strong first quarter results across our key strategic growth platforms of simple meals and baked snacks. Within simple meals, our US soup business delivered strong growth across all formats – condensed, ready-to-serve and broth. Given our strategic emphasis on wellness, we are encouraged by the introduction of our new lower-sodium soups, featuring natural sea salt. Although this initiative is in its early stages, consumer trial has been solid and initial shipments have exceeded our expectations. We will have a better sense of the incremental impact of this effort as the year progresses.”
Conant continued: “Within baked snacks, we achieved strong growth in our Pepperidge Farm bakery and cookies and crackers businesses, as well as solid gains in Arnott’s biscuit business in Australia. Additionally, our beverage business continued its strong growth trend, driven by the innovative ‘V8 V-Fusion’ juice beverages and ‘V8’ vegetable juices. Overall, we are pleased with this very good start to the year.”
Sales in the company’s US Soup, Sauces and Beverages division rose by 8% to $1.05bn, with operating earnings up from $288m to $322m.
Sales from Baking and Snacking rose by 6% to $484m, while operating earnings increased from $50m to $68m. Turnover at Campbell’s International Soup and Sauces division increased by 11% to $346m, with operating earnings rising from $35m to $48m, driven by double-digit increases in the Canadian and European businesses and by favourable currency shifts.
The company has confirmed its existing guidance for the 2007 fiscal year, forecasting that earnings per share from continuing operations will increase by between 5% and 7% from the adjusted pro forma fiscal year 2006 base of $1.73.