Campbell Soup Sees FY18 Earnings Below Market After Q4 Results Miss Estimates

Campbell Soup Co. (CPB) Thursday said it expects fiscal 2018 adjusted earnings per share to be flat or slightly higher than last year, but below market estimates. The company also warned on sales for the year. In its fourth quarter, adjusted earnings and sales missed market view.

In pre-market activity, Campbell Soup shares were losing 1.13 percent to $49.72.

For fiscal 2018, the company expects adjusted earnings per share to change by 0 to 2 percent, or $3.04 to $3.11 per share, adjusted earnings before interest and taxes or EBIT to change by negative 1 percent to positive 1 percent, and sales to change by negative 2 percent to flat.

In fiscal 2017, the company’s adjusted earnings per share were $3.04 and adjusted EBIT was $1.49 billion on sales of $7.89 billion.

On average, analysts polled by Thomson Reuters expected earnings of $3.18 per share on sales of $8.01 billion for the year. Analysts’ estimates typically exclude special items.

Denise Morrison, Campbell’s President and Chief Executive Officer, said, “The operating environment for the packaged foods industry remains challenging due to shifting demographics, changing consumer preferences for food, the adoption of new shopping behaviors and the dynamic retailer landscape. In these times, sales growth remains a challenge…. Looking ahead to fiscal 2018, we expect the operating environment to remain difficult.”

For the fourth quarter, net earnings attributable to the company was $318 million or $1.04 per share, compared to prior year’s loss of $81 million or $0.26 per share.

The latest quarter included gains of $0.52 per share, mainly reflecting pension and postretirement mark-to-market gains and tax benefits, partly offset by charges related to cost savings initiatives. The prior year’s results reflected charges of $0.72 per share mainly related to pension and postretirement mark-to-market losses and non-cash impairment charge.

Adjusted net earnings were $159 million or $0.52 per share, compared to $143 million or $0.46 per share a year ago. Analysts expected earnings of $0.55 per share.

EBIT for the quarter was $440 million, compared to loss of $37 million last year. Adjusted EBIT grew 11 percent from last year to $282 million.

Gross margin increased to 43.0 percent from 32.4 percent last year. Adjusted gross margin increased 0.8 percentage points to 36.9 percent.

Net sales decreased 1 percent to $1.664 billion from $1.687 billion a year ago, driven by a 1 percent decline in organic sales, reflecting…

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