World's largest soup-maker Campbell Soup Co. (CPB: Quote) reported Tuesday a profit for the fourth quarter that increased from last year, which was weighed down by restructuring charges. However, adjusted earnings per share and quarterly revenues topped analysts' expectations, reflecting strong performance of the U.S simple meals business. The company provided earnings and revenue guidance for the full-year 2013, in line with Street view.
"In the fourth quarter, we generated organic sales growth, with gains across most of our portfolio, including strong sales in U.S. Soup and U.S. Simple Meals," President and CEO Denise Morrison said in a statement.
Campbell Soup completed the acquisition of food and beverage company Bolthouse Farms on August 6 from a fund managed by private equity firm Madison Dearborn Partners, LLC for $1.55 billion in cash. The company anticipates Bolthouse Farms to contribute about $750 million to sales and add $0.05 to $0.07 per share to adjusted earnings in fiscal 2013.
Sales for the quarter remained flat with last year at $1.61 billion, but topped fourteen Wall Street analysts' consensus estimate of $1.60 billion by a whisker. Organic sales increased 3 percent.
U.S. simple meals sales grew 7 percent and sale at U.S. beverages increased 3 percent, while global baking and snacking, international simple meals and beverages as well as North America Foodservice sales declined.
The Camden, New Jersey-based maker of ready-to-serve soups, pastas and sauces reported net earnings of $127 million or $0.40 per share for the fourth quarter, higher than $100 million or $0.31 per share in the prior-year quarter. The results for the latest quarter includes transaction costs associated with the acquisition of Bolthouse Farms.
Excluding items, adjusted net earnings for the quarter was $130 million or $0.41 per share, compared to $141 million or $0.43 per share in the year-ago quarter. On average, 17 analysts polled by Thomson Reuters expected the company to earn $0.38 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter declined 130 basis points to 38.5 percent from last year's 39.8 percent as higher selling prices and improved productivity was more than offset by cost inflation and increased promotional spending.
For fiscal 2012, the company reported net income of $774 million or $2.41 per share, lower than $805 million or $2.42 per share in the prior year. Excluding items, adjusted net earnings for the year was $783 million or $2.44 per share, compared to $846 million or $2.54 per share in the year ago. Analysts expected the company to report earnings of $2.40 per share for fiscal 2012.
Net revenues for the full year edged down to $7.71 billion from $7.72 billion in the previous year. Street was looking for full-year 2012 revenues of $7.71 billion.
Looking ahead to fiscal 2013, Campbell Soup now expects adjusted earnings to grow 3 to 5 percent to between $2.51 and $2.57 per share, on projected sales growth of 10 to 12 percent, implying sales between $8.48 billion and $8.64 billion. Street is currently looking for full-year 2013 earnings of $2.52 per share on annual revenues of $8.49 billion.
Previously, the company expected adjusted earnings per share growth to be below its long-term target of 5 to 7 percent, and sales growth to be below its long-term target of 3 to 4 percent, but excluding the positive impact of the Bolthouse Farms acquisition.
CPB closed Friday's regular trading session at $35.14, up $0.02 on a volume of 2.15 million shares. In the past 52-week period, the stock has been trading in a range of $29.93 to $35.60.
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by RTT Staff Writer
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