Campbell Soup shares rise after beating earnings estimates
US food producer’s net sales grow 24%, helped by acquisitions of Snyder’s-Lance and Pacific Foods
Chicago — Campbell Soup on Wednesday reported better-than-expected adjusted earnings, helped by its acquisitions of Snyder’s-Lance and Pacific Foods.
Excluding items, the company earned US77c a share in the second quarter ended January 27, beating the average analyst estimate of 70c, according to Refinitiv data. Campbell’s shares jumped 5% in premarket trading.
Net sales rose 24% to $2.71bn, while organic sales were flat. In 2017, Campbell agreed to buy pretzels and Cape Cod chips maker Snyder’s-Lance for $4.87bn, and organic soup maker Pacific Foods for $700m.
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 $346m writedown 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 $1.35bn off its value in total. The unit, which was put up for sale in August 2018 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 it expects to name buyers for Bolthouse and its international business by the end of its financial 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 and Mondelez International 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 $59m, or 20c per share, compared with earnings of $285m, or 95c per share, a year earlier.