(Updates share price in fifth paragraph.)
Sept. 2 (Bloomberg) -- Campbell Soup Co., the world’s biggest soup maker, said fourth-quarter profit declined 12 percent after U.S. soup, sauce and beverage sales dropped.
Net income fell 12 percent to $100 million, or 31 cents a share, in the period ended July 31, from $113 million, or 33 cents, a year earlier, the Camden, New Jersey-based company said today in a statement. Excluding some items, earnings of 43 cents topped the 38-cent average of 16 analysts’ estimates compiled by Bloomberg.
Chief Executive Officer Denise Morrison, who took over from Doug Conant last month, plans to introduce new soups after Campbell products failed to lure as many consumers as expected during the economic slowdown and struggled to attract younger customers. The company will debut 27 soup products this fiscal year, up from three the year before.
“Soup volumes and consumption were softer this quarter,” Morrison said on a conference call today. “While we expect further volume declines, we will be competitive.”
Campbell fell 40 cents, or 1.3 percent, to $31.46 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have declined 9.5 percent this year.
The company forecast profit for fiscal 2012, excluding some items, may fall as much as 7 percent to $2.36, compared with the average analysts’ estimate of $2.37. In July, it predicted 2012 earnings would decline as much as 6 percent from the year prior.
U.S. soup sales fell 9 percent in the quarter after the company advertised less and raised prices to help offset food inflation. Revenue from the global baking and snacking unit jumped 17 percent, helped by gains from Goldfish snack crackers, Milano cookies, and the impact of currency swings.
Campbell, along with other food makers, has increased its prices on certain items after costs for raw ingredients such as grain rose. Food inflation may be as much as 4 percent in 2011, the U.S. Department of Agriculture predicted last month.
Fourth-quarter sales increased 5.9 percent to $1.61 billion, as currency translation added 5 percent, Campbell said. Analysts estimated $1.57 billion on average. Net income included costs related to cutting jobs, exiting the Russian market and improving supply-chain efficiency.
The maker of Chunky brand soup has struggled to decrease sodium levels in its food while preserving taste. In fiscal 2012, Campbell will shift sodium-reduction research spending to focus on a “broader range of consumer benefits, notably taste and satiety,” Morrison said in July.
Campbell also makes V8 juice and Prego pasta sauce.
(Campbell Soup held a conference call at 10 a.m. New York time. To listen, visit CPB US <Equity> EVT <GO>.)
--Editors: Robin Ajello, John Lear
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