NEW YORK: Campbell Soup has reported a higher-than-expected income for its fiscal second quarter, but did not raise its full-year outlook, saying the back half should bring a steeper tax rate and smaller boost from share buybacks.
Shares of the company were up 1.4 per cent in afternoon trade. They jumped as much as 6 per cent after news of a buyout of rival H.J. Heinz sparked hopes of other acquisitions in the packaged foods industry.
Campbell, which Wall Street has long viewed as a good partner for Heinz, said it has been trying to be more active in terms of mergers. If an opportunity to fill a hole in its portfolio presented itself, the company would be interested, said Chief Financial Officer Craig Owens. Chief Executive Denise Morrison declined to comment on the Heinz deal.
Campbell said US soup sales rose 1 per cent from a year earlier, while sales increased 7 per cent for snacks and fell 3 per cent for US beverages.
Overall, net sales increased 10 per cent to $2.33 billion, due mostly to the company’s recent acquisition of Bolthouse Farms. Net income was $190 million, or 60 cents per share, down from $205 million, or 64 cents per share, a year earlier.
Excluding restructuring and other charges, earnings in Campbell’s fiscal second quarter, ended Jan.27, were 70 cents per share. On that basis, analysts’ average forecast was 66 cents, according to Thomson Reuters.
Campbell, the world’s largest soup maker, stood by its forecast for fiscal 2013, which calls for earnings of $2.51 to $2.57 per share on sales growth of 10 per cent to 12 per cent. The company, which has been trying to reverse weak soup sales with new products, spent less on advertising in that business.