MOUNT LAUREL, N.J. – Campbell Soup Co. (CPB), the world's biggest soup maker, on Friday reported second-quarter earnings were up 8 percent over the same period a year earlier because of stronger soup sales and lower taxes.
For the second year in a row, Campbell announced price increases kicking in toward the end of the big soup season. This year, soup, sauce and beverage prices will be up by an average of 2.3 percent, the company said. The increases will come in about 40 percent of the company's products in that division, mostly on products that did not see price increases last year.
Earnings increased to $254 million, or 61 cents per share, for the quarter ended Jan. 29, up from $235 million, or 57 cents per share, a year earlier. Sales rose 3 percent to $2.28 billion from $2.22 billion.
Chief Executive Douglas Conant told analysts in a conference call that the company increased soup sales for the quarter by 7 percent over the same quarter a year earlier despite unusually warm weather in January, which is traditionally the company's biggest month for soup.
"We feel as if, quote-unquote, we weathered January very well," Conant said.
The company's traditional red and white label condensed soup, its expanding line of ready-to-serve soups and its broths all saw sales increases between 6 percent and 9 percent over the second quarter of the previous fiscal year.
The company also benefited from a lower tax rate in the second quarter: 29.4 percent this year compared to 31.7 percent in the previous year.
For the first half of fiscal 2006, Campbell earnings were $556 million, or $1.34 per share, up from $465 million, or $1.13 per share, in the previous year. Revenue for the first half rose to $4.39 billion from $4.31 billion.
The company's performance matched its own expectations and was a bit better than the 59 cents per share expected by analysts surveyed by Thomson Financial.
Campbell reaffirmed its profit outlook for the rest of the year, saying it still expects earnings to increase 5 percent to 7 percent per share after taking out one-time items.
In addition to soups, the company produces a variety of other food products, including V8 juices, Prego pasta sauce, Pepperidge Farm cookies and crackers and Godiva chocolates, as well as brands sold overseas.
Campbell shares rose 19 cents, to close at $30.65 on the New York Stock Exchange. Over the past 12 months, the stock has traded between $27.35 and $31.60.
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