Campbell’s non-soup sales help even out 4Q revenues

Soup sales for Campbell Soup Co. fell 5 percent in the fourth quarter in a tough economy, the Camden company reported today.

Even with the declines in the all-important soup category, Campbell said that adjusted net earnings rose to $113 million (33 cents a share) for the quarter ended Aug. 1 from $107 million (30 cents a share) in the year-ago period because of productivity improvements and cost savings.

One productivity boost, according to spokesman Anthony Sanzio, was reducing the variety of carrot and potato dice sizes in the soup. The soup company previously used 10 sizes of carrot chunks and 11 sizes of potato chunks. Those have been reduced to thee for carrots and two for potatoes, which has simplified the soup-manufacturing process. The amount of vegetable in the soup is the same, he said.

With the help of non-soup products, Campbell's quarterly revenues were flat at $1.5 billion. Campbell Soup also manufactures and sells snacks and V8 beverages.

V8 sales helped drive a 12 percent increase in beverage sales in the quarter, while sales of Prego pasta and Pace Mexican sauces declined. Broth sales rose 9 percent.

The report was greeted with some dismay on Wall Street, where Campbell's stock price slid 3.45 percent, or $1.29, to $36.03 in trading.

Douglas R. Conant, president and chief executive officer, said the company would energize its product lines with new products and product extensions.

"In U.S. soup, we have significant plans to enhance our condensed soups, strengthen our competitiveness in ready-to-serve soups, and introduce a new advertising campaign," Conant said.

The $100 million "It's Amazing What Soup Can Do" campaign will begin Monday night.

For the year, Campbell Soup sales rose to $7.7 billion from $7.6 billion in the previous year. Net earnings were $844 million, compared with $736 million.

Campbell projects fiscal 2011 sales growth of 2 percent to 3 percent and earnings per share growth of 4 percent to 5 percent, which is below its long-term target. The company said the lowered targets reflect a weak economy and consumer confidence.