Campbell's Baking and Snacking net falls 22%

by Eric Schroeder
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CAMDEN, N.J. — Operating earnings within the Baking and Snacking division of the Campbell Soup Co. fell 22% in the second quarter ended Feb. 1 to $53 million from $68 million, driven primarily by a decline in Pepperidge Farm and the unfavorable impact of currency, partially offset by growth in Arnott’s.

Sales fell 10% to $440 million, compared with $491 million in the same period last year.

"Sales of Pepperidge Farm products increased driven by gains in the cookies and crackers and bakery business," the company said. "In the cookies and crackers business, sales increases were driven by double-digit gains in Goldfish snack crackers and in Milano cookies, as well as the introduction of Baked Naturals, and adult savory snack cracker.

"The bakery business also delivered solid sales growth behind whole grain and Swirl breads."

In the company’s Arnott’s business, sales declined due to the divestiture of certain salty snack food brands in May and the unfavorable impact of currency. Excluding those items, sales rose behind growth in savory crackers, partially offset by a decline in chocolate biscuits.

For the first six months of fiscal 2009, operating earnings within the Baking and Snacking division fell 3% to $136 million from $140 million. Sales eased 7% to $949 million.

Overall, Campbell Soup Co. posted earnings of $233 million in the second quarter, equal to 66c per share on the common stock, down 15% from $274 million, or 73c per share, in the second quarter of fiscal 2008. The most recent quarter included charges associated with previously announced restructuring initiatives and the impact of an unrealized loss on the company’s commodity hedging activities and a tax adjustment related to the divestiture of the Godiva business. Excluding those items, adjusted net earnings would have been $234 million, down from $266 million in the same period a year ago. Net sales were $2,122 million, down 4% from $2,218 million.

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