Campbell Soup Beats Earnings Estimates, Shares Rise
Published on Feb 28 2019 7:50 AM
Campbell Soup Co on Wednesday reported better-than-expected adjusted earnings, helped by its acquisitions of Snyder's-Lance and Pacific Foods.
Excluding items, the company earned 77 cents a share in the second quarter ended 27 January, beating the average analyst estimate of 70 cents, according to Refinitiv data. Campbell's shares jumped 5% in premarket trading.
Net sales rose 24% to $2.71 billion, while organic sales were flat. In 2017, Campbell agreed to buy pretzels and Cape Cod chips maker Snyder's-Lance Inc for $4.87 billion, and organic soup maker Pacific Foods for $700 million.
Like other packaged food companies, Campbell has been struggling to attract young, increasingly health-conscious consumers. It has tried to make its portfolio healthier, and launched a cost-cutting and divestment plan in August.
Campbell reported a net quarterly loss, hurt by higher restructuring costs and a $346 million write-down of its troubled fresh food business.
This is the fourth time New Jersey-based Campbell has written down the value of its fresh unit since September 2016, knocking about $1.35 billion off its value in total. The unit, which was put up for sale in August after a months-long strategic review, includes Bolthouse Farms. The business has struggled in recent years, with issues ranging from farming missteps to the recall of 3.8 million bottles of protein shakes.
Campbell said on Tuesday that it expects to name buyers for Bolthouse and its international business by the end of its fiscal year in July. The company also said it had agreed to sell salsa maker Garden Fresh Gourmet to a unit of Fountain of Health USA, which makes hummus, dips and prepared salads. Terms of the deal were not disclosed.
Sources told Reuters in December that Kraft Heinz Co and Mondelez International Inc were among those bidding for Campbell's international business, which includes Australian cookie brand Arnott's and Danish baked snacks maker Kelsen Group.
The net loss attributable to Campbell was $59 million, or 20 cents per share, compared with earnings of $285 million, or 95 cents per share, a year earlier.