Restructuring, acquisition pressure Campbell earnings

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CAMDEN, N.J. — Restructuring and acquisition costs contributed to an 8% decline in earnings during the first quarter at Campbell Soup Co.

For the quarter ended Oct. 28, the company had earnings of $245 million, equal to 78c per share on the common stock, which compared with income of $265 million, or 82c per share, during the same quarter of the previous year. Sales for the quarter were $2,336 million, up 8% from $2,161 million during the same quarter of the previous year. The results included costs related to the acquisition of Bolthouse Farms and a previously announced September 2012 restructuring program.

“In our largest business, U.S. Simple Meals, we generated sales growth both in U.S. Soup and in U.S. Sauces, driven by innovation in our base business and by new product introductions,” said Denise Morrison, president and chief executive officer. “Our recently acquired Bolthouse Farms business performed very well in the quarter, and we remain excited about the growth platform it provides Campbell in the packaged fresh foods category.

“We delivered continued solid performance at Pepperidge Farm in the crackers business, while our bakery business declined in the quarter. Our Asia Pacific business delivered good results, driven by improved performance in Australia and strong sales growth in Malaysia and Indonesia. In U.S. Beverages, our core business in original ‘V8’ vegetable juice and ‘V8 V-Fusion’ beverages continued to be challenged by slackening consumer demand.”

The U.S. Simple Meals segment had earnings of $274 million, up 5% from $260 million during the same quarter of the previous year. Sales for the segment were $896 million, up 3% from $874 million.
The Global Baking and Snacking segment had earnings of $85 million, down 3% from $88 million during the same quarter of the previous year. Sales for the segment were $574 million, up 1% from $568 million.

The Bolthouse and Foodservice segment had earnings of $34 million, up 26% from $27 million during the same quarter of the previous year. The segment had sales of $323 million, up 99% from $162 million.

For fiscal 2013, the company expects sales growth of between 10% and 12% and adjusted earnings per share to be between $2.51 and $2.57.

“Overall our fiscal year 2013 is off to a solid start,” Ms. Morrison said. “We remain focused on returning our company to sustainable, profitable net sales growth. We know we have more work to do to change Campbell’s growth trajectory and achieve our long-term targets on our base business.”

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