Campbell baking unit earnings fall 3% in quarter

by Eric Schroeder
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CAMDEN, N.J. — Operating earnings within the Global Baking and Snacking division of the Campbell Soup Co. totaled $85 million in the first quarter ended Oct. 28, down 3% from $88 million in the same period a year ago. Campbell said the decrease in earnings reflected lower earnings in Arnott’s and Pepperidge Farm, both of which were affected adversely by increased promotional spending.

Sales rose 1% to $574 million, which compared with $568 million in the first quarter of fiscal 2012.

Volume and mix added 2 percentage points, as did price and sales allowances. Increased promotional spending subtracted 3 percentage points.

“Sales of Pepperidge Farm products increased, driven by volume gains and higher selling prices, partially offset by increased promotional spending,” Campbell said. “In cookies and crackers, sales increases were driven by solid gains in Goldfish snack crackers and the launch of Jingos!, partly offset by declines in cookies.

“Bakery sales declined. Bakery sales were negatively impacted by increased promotional spending in response to competitive activity.”

Campbell said sales at Arnott’s increased primarily due to double-digit gains in Indonesia. Sales in Australia were comparable to the prior year.

Overall, restructuring and acquisition costs contributed to an 8% decline in earnings during the first quarter at Campbell Soup Co. For the quarter ended Oct. 28, the company had earnings of $245 million, equal to 78c per share on the common stock, which compared with income of $265 million, or 82c per share, during the same quarter of the previous year. Sales for the quarter were $2,336 million, up 8% from $2,161 million during the same quarter of the previous year. The results included costs related to the acquisition of Bolthouse Farms and a previously announced September 2012 restructuring program.

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