Campbell: Baking and Snacking earnings fall 22% in Q2/2009

Camden / NJ. (csc) Campbell Soup Company reported net earnings for the quarter ended February 01, 2009 of 233 million USD, compared to 274 million USD in the prior year. The fiscal 2009 reported net earnings included charges associated with previously announced restructuring initiatives, the impact of unrealized losses on the company´s commodity hedging activities and a tax adjustment related to the divestiture of the Godiva business. Excluding all items impacting comparability, adjusted net earnings were 234 million USD in the current quarter compared to adjusted net earnings of 266 million USD in the prior year´s quarter. Adjusted net earnings per share were 0,65 USD in the current quarter compared to adjusted net earnings per share of 0,69 USD in the prior year´s quarter. Reflecting strengthening of the U.S. Dollar, adjusted net earnings per share for the quarter were negatively impacted by 0,04 USD due to currency translation.

Baking and Snacking division

Sales for Baking and Snacking were 440 million USD, a decrease of ten percent from a year ago. A breakdown of the change in sales follows:

• Volume and mix subtracted one percent
• Price and sales allowances added nine percent
• Increased promotional spending subtracted two percent
• Currency subtracted eight percent
• Divestitures subtracted eight percent

Further details of sales results include the following:

• Sales of Pepperidge Farm products increased driven by gains in the cookies and crackers and bakery businesses.
  • In the cookies and crackers business, sales increases were driven by double-digit gains in «Goldfish» snack crackers and in «Milano» cookies, as well as the introduction of Baked Naturals, an adult savory snack cracker.
  • The bakery business also delivered solid sales growth behind whole-grain and Swirl breads.
• On a reported basis, Arnott´s sales declined due to the divestiture of certain salty snack foods brands in May 2008 and the unfavorable impact of currency. Excluding these factors, sales increased due to growth in all segments: savory, chocolate and sweet.
• Sales of biscuits in Indonesia grew strongly.

Operating earnings were 53 million USD compared with 68 million USD in the prior-year period. The decrease in operating earnings was due to a decline in Pepperidge Farm and the unfavorable impact of currency, partially offset by significant growth in Arnott´s. The current quarter included two million USD in accelerated depreciation and other exit costs related to the previously announced restructuring initiative.

For the first half, sales decreased seven percent to 949 million USD. A breakdown in the change in sales follows:

• Volume and mix subtracted one percent
• Price and sales allowances added nine percent
• Increased promotional spending subtracted two percent
• Currency subtracted five percent
• Divestitures subtracted eight percent

Operating earnings were 136 million USD compared to 140 million USD in the year-ago period. The decrease in operating earnings was due to the unfavorable impact of currency. Excluding currency, significant growth in Arnott´s was partly offset by a decline in Pepperidge Farm. The current period included two million USD in accelerated depreciation and other exit costs related to the previously announced restructuring initiative.

Info: Campbell Reports Second Quarter Results (complete press release)