FY 2009: Earnings up 118% in Campbell’s baking unit

Camden / NJ. (csc) Campbell Soup Company said that its fourth quarter profit fell 22 percent from last year, but adjusted profits rose. The Camden, New Jersey-based company reported fiscal fourth quarter net income of 69 million USD or 0,20 USD per share, compared with 89 million USD or 0,24 USD per share in the year-ago period. Excluding one-time items, adjusted profit was 0,30 USD per share. On average, Wall Street analysts expected a lower adjusted profit of 0,26 USD per share. Sales in the latest quarter fell ten percent from last year to 1,53 billion USD.

As for the full fiscal year, Campbell reported a profit of 736 million USD or 2,06 USD per share on sales of 7,6 billion USD. Last year, it earned 1,17 billion USD or 3,06 USD per share on sales of eight billion. The company claimed, however, that after being adjusted for compatibility, that this year´s earnings were stronger than last.

Douglas R. Conant, Campbell´s President and Chief Executive Officer: «We completed the year with a solid fourth quarter and delivered a strong year of earnings growth. We were able to overcome currency headwinds and other macroeconomic challenges to achieve adjusted earnings per share growth within our long-term target of between five and seven percent. We successfully introduced innovative new products and delivered strong sales growth across our entire U.S. soup portfolio and sauces businesses. We delivered an outstanding year in our Asia Pacific business, produced a very solid year in Pepperidge Farm and continued to advance our plans in the emerging markets of Russia and China. We also improved our gross margins through a combination of pricing actions and productivity improvements and generated more than one billion in cash flow from operations».

Baking and Snacking Division

Fourth-quarter sales for Baking and Snacking were 466 million USD, a decrease of 13 percent from a year ago. A breakdown of the change in sales follows:
Volume and mix subtracted one percent.
Price and sales allowances added four percent.
Increased promotional spending subtracted two percent.
Currency subtracted six percent.
Divestitures and acquisitions subtracted one percent.
One less week subtracted seven percent.

Further details of sales results include the following:

• Pepperidge Farm sales declined due to one less week and a decline in the bakery business, partially offset by growth in the cookies and crackers business, driven by continued consumer demand for «Goldfish» snack crackers.
• In Australia, sales declined due to the impact of currency, one less week, divestitures and the discontinuation of private label and industrial chocolate businesses associated with the closing of a plant, partially offset by growth in the core Arnott´s branded business. The biscuit business in Indonesia achieved significant sales growth.

Fourth-quarter operating earnings decreased to 69 million USD compared with 72 million USD a year ago. The decrease in operating earnings was due to the negative impact of currency, one less week and lower earnings in Arnott´s, partially offset by increased earnings in Pepperidge Farm.

For fiscal 2009, sales in this segment decreased by ten percent to 1’846 million USD. A breakdown of the change in sales follows:
Volume and mix subtracted one percent.
Price and sales allowances added seven percent.
Increased promotional spending subtracted two percent.
Currency subtracted six percent.
Divestitures and acquisitions subtracted six percent.
One less week subtracted two percent.

Operating earnings were 262 million USD compared with 120 million USD in the year-ago period. The current year included three million USD in costs related to initiatives to improve operational efficiency and long-term profitability compared with 144 million USD in such costs in the prior year. Excluding these items, operating earnings increased, as earnings growth in Pepperidge Farm and Arnott´s was mostly offset by the negative impact of currency and one less week (source).