Strong competition hurt this blue chip stock’s earnings in the latest quarter

Campbell Soup Co., symbol CBB on New York, is the world’s largest maker of canned soups. It also makes Prego canned pasta and sauces, Pepperidge Farm cookies and V8 vegetable juices. The company gets 19.8% of its sales from international markets. Its biggest foreign markets are Australia and Europe.

In the three months ended January 30, 2011, company’s sales fell 1.2%, to $2.13 billion from $2.15 billion. Soup sales fell 4.0% in the U.S. The company continues to face strong competition from generic brands. In response, it ran promotions that discounted the prices of some of its brands, particularly ready-to-serve soups.

Earnings fell 7.7%, to $239.0 million from $259.0 million a year earlier. The company spent $417 million on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share fell 4.1% to $0.71 from $0.74. The lower sales and higher advertising spending were the main reasons for the decline.

You can get our in-depth analysis, including our updated buy/sell/hold advice, on Campbell and other blue chip stocks when you subscribe to Wall Street Stock Forecaster. What’s more, you can get one month free when you subscribe today. Click here to learn how.


Tell Us What YOU Think

You must be logged in to post a comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.