Weak Earnings, Forecast Send Campbell’s Shares Down 5%

Packaged foods giant Campbell Soup Company (NYSE:CPB) posted weak Q2 earnings before the bell today and offered a tepid forecast, sending its shares plunging nearly 5%.

The Camden, NJ-based company reported Q2 adjusted net income of $0.46 per share, missing Wall Street estimates of $0.50. Revenue fell 0.4% from last year to $1.69 billion, which was in-line with analysts’ view.

Looking ahead, Campbell Soup forecast full-year 2017 EPS of $3.00 to $3.09 per share, which would badly miss Wall Street estimates of $3.13 per share for the year. Sales-wise, CPB sees full-year results of $7.96 billion to $8.04 billion, which would also miss estimates of $8.06 billion.

From the press release:

Denise Morrison, Campbell’s President and Chief Executive Officer, said, “We finished the year in line with our guidance, including strong profit performance. However, I am not pleased with the results of our fourth quarter. The performance of our Campbell Fresh business, driven predominantly by execution issues, is disappointing. We have taken and are taking steps designed to ensure the business performs to its potential. We remain confident in our Campbell Fresh strategy and its ability to deliver long-term growth consistent with its portfolio role, as the business remains well-positioned to capitalize on the health and well-being consumer trend. For the year, Americas Simple Meals and Beverages and Global Biscuits and Snacks delivered significant margin expansion, driving double-digit profit growth. Despite the difficult quarter, we delivered adjusted EPS growth of 11 percent for the year.”

Morrison concluded, “While we have made progress, we recognize we need to deliver sales growth – and it remains a top priority. Reflecting its confidence in our long-term growth prospects and strong profit performance this year, the Board declared a 12 percent increase in our quarterly dividend today.”

On a positive note, the company did boost its quarterly dividend payout by 12% to $0.35 per share.

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The dividend raise wasn’t enough to mitigate the sell-off in Campbell Soup shares, however. CPB fell $2.72 (-4.48%) to $58.00 in premarket trading this morning. Prior to today’s report, CPB had risen nearly 16% year-to-date.

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