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Campbell Soup Company Reports Improved Results for Q3

06/06/2019

In a press release dated June 5th Campbell Soup Company (CPB) announced results for the 3rd Quarter of Fiscal 2019 ending April 28th.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

3rd Quarter Ending

April 28th 2019

April 29th 2018

Difference (%)

Sales:

$2,178,000

$1,878,000

+16.0

Gross profit:

$723,000

$615,000

+17.6

Operating income:

$266,000

$158,000

+68.3

Pre-tax Income

Net Income

$175,000

$84,000

$116,000

$(393,000)

+50.9

+121.4

Diluted earnings per share:

$0.28

$(1.31)

+121.4

Gross Margin (%)

33.2

32.7

+1.5

Operating Margin (%)

12.2

8.4

+45.2

Profit Margin (%)

3.8

(20.9)

+118.2

Long-term Debt:

$7,507,000

$8,080,000

-7.1

12 Months Trailing:

     

Return on Assets (%)

6.6

   

Return on Equity (%)

9.1

   

Operating Margin (%)

14.8

   

Profit Margin (%)

3.1

   

Total Assets

$13,768,000

$14,566,000

-5.5

Market Capitalization

$12,920,000

   

Q3 FY 2019 earnings were adversely impacted by a $47 million charge for discontinued operations. The value for Q3 FY 2018 was $466 million.

52-Week Range in Share Price: $32.03 to $43.98

Market Close: Tuesday June 4th pre-release $38.18.

Market close: Thursday June 5th post-release $41.92

Forward P/E 17.0 Beta 0.7

In commenting on results, Mark Clouse, president and CEO stated, "Our results this quarter were ahead of our expectations, making it the third consecutive quarter that we met or exceeded our outlook. I am also pleased to see profitability trends are improving, driven by sequential gross margin improvement.

He added "In the quarter, we continued to drive sales growth in Global Biscuits and Snacks, fueled by our U.S. Snacks portfolio. The business continues its growth trends on Pepperidge Farm, coupled with improvements in the Snyder's-Lance portfolio. In the Meals and Beverages segment, although there is more to do, we are making steady improvements on gross margin and profit and this business is showing signs of stabilization."

On April 12th 2019, the company announced that it had entered into an agreement to sell its Bolthouse Farms business. As a result of this, and along with the recently completed divestitures of the U.S. refrigerated soup and Garden Fresh Gourmet businesses in the third quarter of fiscal 2019, Campbell Fresh is now reported as discontinued operations.

The offer by Mondelez to purchase the Arnott's biscuit brand has been withdrawn. The asking price of $3 billion was considered excessive by Mondelez owner of the Oreos® and Chips Ahoy® brands. Campbell's is "evaluating multiple options with strategic and financial buyers" for the Arnott's business according to Mark Clouse. Sale of the business is required to draw down debt incurred in the purchase of Snyder's-Lance.