Boston, MA 05/20/2014 (wallstreetpr) – Manufacturer of simple meals and high-quality foods, Campbell Soup Company (NYSE:CPB) has reduced its earnings and sales outlook for the fiscal year 2014 after the company’s sales failed to meet the analysts’ expectations for the third quarter. However, its adjusted earnings per share came in above the estimations.
Outlook
The company has reduced its adjusted earnings forecast and now expects it to be at the lower end of its previously announced forecast of $2.53 – $2.58 a share. Street analysts’ predict Campbell Soup Company to report earnings of $2.53 a share. Similarly, Campbell Soup Company (NYSE:CPB) has cut down its net sales outlook growth to about 3% from its earlier 4% – 5% projection. Analysts expect sales to fall 2.80% in the current fiscal year of 2014.
3Q Results
The company disclosed earnings from continuing operations of $184 million or 58 cents a share, up 9% from $169 million or 53 cents a share in the previous year quarter. However, on an adjusted basis, its earnings from continuing operations grew 7% to $195 million or 62 cents a share from $183 million or 58 cents a share in the year-ago quarter. On average, 15 Wall Street analysts predicted the simple meals maker to report earnings of 59 cents a share.
Net sales advanced 0.4% to $1.97 billion from $1.96 billion in the year earlier quarter. This is weaker than 12 analysts’ average revenue estimation of $2.0 billion. While organic sales rose 1%, volume and mix and acquisitions added 2% each respectively. However, higher promotion spending and currency have forced Campbell Soup Company to subtract 3% and 2% respectively.
Campbell Soup Company (NYSE:CPB)’s adjusted gross margin slipped to 35.2% from 37.0% in the year-ago quarter. The margin erosion was because of increased spending towards promotion, cost escalation, increased supply chain expenses besides the acquisition impact, which was partly offset by improvements in productivity and increased selling prices.
