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Campbell Soup (CPB) Slips as Q3 Earnings Fall Y/Y, Ups View

Zacks Equity Research
Updated

Campbell Soup Company CPB, the manufacturer of branded convenience food products, reported third-quarter fiscal 2016 results wherein adjusted earnings of 65 cents a share were in line with the Zacks Consensus Estimate. However, the bottom line fell nearly 2% year over year.

Following the quarter, Campbell Soup reiterated its sales outlook for fiscal 2016, projecting net sales growth to come in the -1% to 0% range. However, it raised its adjusted EBIT and earnings guidance. Adjusted EBIT is expected to rise 11% to 13%, compared to the previous guidance of 10% to 13%. Adjusted earnings are anticipated in the range of $2.93 - $3.00 per share, reflecting a growth of 11% to 13%. Earlier, the company had projected earnings in the range of $2.88 - $2.96 per share, up 9% to 12% year over year.

Earnings Estimate Revision: The Zacks Consensus Estimate has witnessed an uptrend in the last 90 days. Also, the company’s performance over the trailing four quarters has been quiet encouraging. In the trailing four quarters (including the quarter under review), the company has outperformed the Zacks Consensus Estimate by an average of 6.8%.

Revenues: Campbell Soup generated total sales of $1,870 million that declined 2% year over year and missed the Zacks Consensus Estimate of $1,912 million. The year over year decline is attributed to a fall in organic sales and adverse currency translations, offset by benefits of the Garden Fresh Gourmet acquisition. Organic sales fell 2% driven by decline in volumes and higher promotional spending, partly offset by increased selling prices.

Zacks Rank: Currently, Campbell Soup carries a Zacks Rank #2 (Buy) which is subject to change following the earnings announcement.

Stock Movement: Campbell Soup’s shares dipped nearly 2.3% during pre-market trading hours following the earnings release. Investors developed a negative sentiment as earnings and sales fell year over year.

Check back later for our full write up on Campbell Soup’s earnings report!

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