Campbell Soup Company Earnings: Tops Street Estimates as Revenue Rises

S&P 500 (NYSE:SPY) component Campbell Soup Company (NYSE:CPB) reported its results for the first quarter. Campbell Soup, with its consolidated subsidiaries, is a global manufacturer of convenience food products.

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Campbell Soup Company Earnings Cheat Sheet

Results: Net income for Campbell Soup Company fell to $245 million (78 cents per share) vs. $265 million (82 cents per share) a year earlier. This is a decline of 7.5% from the year-earlier quarter.

Revenue: Rose 8.1% to $2.34 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Campbell Soup Company reported adjusted net income of 88 cents per share. By that measure, the company beat the mean estimate of 85 cents per share. It beat the average revenue estimate of $1.81 billion.

Quoting Management: “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. 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.”

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 2.5 percentage points from the year-earlier quarter to 37%. In that span, margins have contracted an average of 1.6 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the fourth quarter of the last fiscal year, by 4 cents in the third quarter of the last fiscal year, and by 2 cents in the second quarter of the last fiscal year.

Revenue has now gone up for three straight quarters. In the fourth quarter of the last fiscal year, revenue rose 0.4% to $1.61 billion while the figure rose 0.4% in the third quarter of the last fiscal year from the year earlier.

Net income has dropped 1% year-over-year on average across the last five quarters. Performance was hurt by a 14.2% decline in the second quarter of the last fiscal year from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the second quarter has moved up from 68 cents a share to 69 cents over the last ninety days. For the fiscal year, the average estimate has moved up from $2.50 a share to $2.54 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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