CHICAGO – Campbell Soup Co. (CPB) on Monday posted a better-than-expected 9 percent rise in profit, sending shares to a near three-year high, as heavy promotions and product improvements spurred soup sales.
Condensed soup sales have fallen in the past three years, though that decline had moderated to only 2 percent in fiscal 2004.
Campbell has been revamping its product line and packaging in order to boost sales. The company reported a 10 percent rise in U.S. sales of its condensed soups, which come in its iconic red-and-white cans, a business that had been slow to recover.
The maker of Chunky soup, Pepperidge Farm (search) cookies and Godiva (search) chocolate said profit rose to $230 million, or 56 cents per share, in the fiscal first quarter ended Oct. 31, from $211 million, or 51 cents a share, a year earlier.
Analysts on average had forecast 52 cents a share, according to Reuters Estimates.
Sales rose 9.5 percent to $2.09 billion. Analysts on average had forecast $1.95 billion. The weak dollar, which increases the value of international sales, added 2 percent to revenue. Shipment volume was up 9 percent.
Campbell moved more of its marketing and promotional spending into the first quarter, which helped drive improvement for the overall soup industry as well as improving its position, the company said. Much of the marketing was behind ready-to-serve soups, including the new Campbell's Chunky chili.
Campbell stood by its forecast for a 5 to 7 percent increase in earnings per share in fiscal 2005, excluding restructuring charges.
Shares of Camden, New Jersey-based Campbell were up $1.83, or 6.7 percent, at $29.19 on Monday morning on the New York Stock Exchange. Earlier in the session, the shares reached a high of $29.48, the highest level since January 2002.