Campbell Soup reports 2.2% increase in Q3 2013 net earnings

US food company Campbell Soup has reported that its net earnings increased 2.2% to $181m for the third quarter of 2013, compared with $177m for the same period in 2012.

The net earnings for the quarter were driven by double-digit sales growth in condensed, ready-to-serve soups and broth businesses.

For the quarter ended 28 April 2013, net sales increased 14.9% to $2.09bn, compared with $1.82bn for the same period in the last year, due to improved soup sales and the acquisition of Bolthouse Farms last year.

The acquisition of Bolthouse Farms added 11% to sales, volume and mix added 5%, price and sales allowances added 1%, while increased promotional spending subtracted 2%.

Campbell Soup stated that during the quarter, the company drove profitable growth in many of its core North American businesses through enhanced products, stronger advertising and effective in-store presence.

Campbell Soup president and chief executive officer Denise Morrison said that the company is strengthening its core portfolio through consistent excellence in execution, optimised investment and sustaining product innovation.

"We are also expanding into higher-growth categories, adjacencies and geographies."

"Our strategic plan is intended to deliver sustainable, profitable net sales growth," Morrison added.

The company is still in the early stages of executing the plan, and believes that the third-quarter results reflect the long-term promise of the plan.

Segment-wise, the US Simple Meals posted an 11% increase in sales to $627m due to increased sales of condensed soups, ready-to-serve soups and broth.

Global Baking and Snacking segment sales increased 5% to $568m driven by Pepperidge Farm products and Arnott’s brand products.

International Simple Meals and Beverages sales increased 2% to $357m due to higher sales in Europe, Latin America and the Asia Pacific region, which were partially offset by a decline in Canada.

The US Beverages division reported a 5% decrease in sales to $198m due to lower volume on 100% juice varieties, cost inflation and increased promotional spending.

Sales for Bolthouse and Foodservice rose to $344m, compared to $154m in the previous year, with the acquisition of Bolthouse Farms contributing $205m.

For the nine-months ended 28 April 2013, the company reported net earnings of $616m, compared with $647m in the year ago period, while net sales increased 11% to $6.76bn.

As of 28 April 2013, the company’s net debt increased by $1.42bn to $3.8bn, primarily due to funding the purchase of Bolthouse Farms.

Campbell Soup revised its previous fiscal 2013 guidance – the company now expects sales to increase at the upper end of 10% to 12%, adjusted EBIT at the upper end of 4% to 6%, and adjusted EPS between 6% and 7%.

For the full-year, the company expects Bolthouse Farms to contribute approximately $750m to sales and add approximately $0.06 to adjusted EPS.

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Image: Campbell Soup stated that during the quarter, the company drove profitable growth in its core North American businesses through enhanced products, stronger advertising and effective in-store presence. Photo courtesy of Coolcaesar.