Campbell baking unit posts 33% earnings gain

by Eric Schroeder
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CAMDEN, N.J. — Operating earnings within the Baking and Snacking division of the Campbell Soup Co. totaled $76 million in the third quarter ended May 2, up 33% from $57 million in the third quarter of fiscal 2009. Last year’s third quarter included $1 million in costs related to a previously announced restructuring initiative.

Sales rose $11% to $477 million, which compared with $431 million in the same period last year. Currency contributed nine percentage points to the growth, while volume and mix added three percentage points. Price and sales allowances and acquisitions each contributed one percentage point, while increased promotional spending subtracted three percentage points.

“Sales of Pepperidge Farm increased primarily due to the acquisition of Ecce Panis, Inc. and gains in the cookies and crackers business,” the company said. “Excluding the acquisition of Ecce Panis, sales from the bakery business were comparable to the prior year, as volume increases were mostly offset by increased promotional spending. In the cookies and crackers business, sales increased, reflecting the continued solid growth of Goldfish snack crackers, partly offset by a decline in cookies.”

In Australia, Campbell said its sales increased due to currency and the continued growth in the company’s Arnott’s business, led by chocolate snacks.

For the first nine months of fiscal 2010, operating earnings within the Baking and Snacking division were $249 million, up 29% from $193 million. Sales climbed 8% to $1,496 million from $1,380 million.
Overall, Campbell Soup Co. posted earnings of $168 million in the third quarter, equal to 49c per share on the common stock, down from $174 million, or 49c per share, in the third quarter of fiscal 2009. Excluding items affecting comparability, adjusted net earnings in the most recent quarter were $186 million, up from $171 million. Net sales were $1,802 million, up 7% from $1,686 million.

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