Campbell Soup Company posted an increase in profit for its fiscal third quarter ended May 1, 2005, beating the expectations of many analysts.
The company reported diluted earnings per share for the third quarter of $.35, compared with $.34 in the same period the previous year. Last year’s results included a $.02 gain from Campbell’s share of a class action settlement involving ingredient suppliers.
Campbell’s net sales went up 4% to $1.7 billion. Net earnings for the third quarter of fiscal 2005 were $146 million compared with $142 million in the prior year. The prior year’s third quarter results included a $10 million after-tax gain from the settlement of the lawsuit.
According to a press release, for the first nine months of fiscal 2005, the company also reported strong cash flow from operations of $772 million compared with $576 million in the year-ago period. The increase was driven by improved working capital performance, lower cash settlements related to foreign currency hedging transactions and higher earnings.
For the first nine months of fiscal 2005, the company reported net earnings of $611 million, or $1.48 per share, versus $588 million, or $1.43 per share for the prior year. Net earnings for the prior year period included the $10 million, or $.02 per share, after-tax gain from the settlement of the class action lawsuit.
President and CEO, Douglas R. Conant said, “Our company’s third quarter results continued our strong year-to-date performance across multiple businesses. We are very pleased with the performance of Pepperidge Farm, Arnott’s biscuits, Godiva Chocolatier, and our Away From Home soup business. In our U.S. Soup, Sauces and Beverages segment, lower trade promotion activity and the pricing action we took at the end of February, as anticipated, impacted volume unfavorably, especially in ready-to-serve soup. However, we grew sales of condensed soup 4 percent in the quarter and 6 percent for the first nine months, the best performance in many years.
“As planned, we have strengthened our margins, leveraging the pricing action and continuing our aggressive cost management. We have significantly increased cash flow from operations and strengthened our balance sheet. We expect a solid fourth quarter as the impact of the price increase on volume moderates. We are also looking forward to next year with new product introductions and a continued emphasis on enhancing product quality, convenience and availability.”
The company confirmed its fiscal 2005 guidance for earnings per share to increase between 5 and 7% from the adjusted fiscal year 2004 base of $1.58. The company also said that capital expenditures for the year are now projected to be approximately $350 million, versus a previous forecast of $380 million, with a portion of the reduced spending shifting to fiscal 2006.
Chris is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
