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Campbell Soup lifts 2011 profit outlook

Campbell Soup lifts 2011 profit outlook

Campbell Soup Co. is raising its fiscal 2011 adjusted earnings outlook, but the world's largest soup maker lowered its forecast for next fiscal year, saying it's going to make investments to improve its products.
The guidance came as Campbell officials prepared to meet Tuesday with Wall Street analysts. Incoming president and CEO Denise Morrison _ who will take the helm as fiscal 2012 begins on Aug. 1, when Douglas Conant steps down after more than a decade _ laid out her vision for the food company.
Morrison said she wants to build U.S. sales to Hispanic consumers and the generation born after 1979.
"These consumers have no intrinsic barrier to soup as a food; they love soup," Morrison said as she acknowledged some company missteps in recent years. "But many of them don't connect with our soup products."
She said the company will focus less on how much soup it sells, which has been a struggle the past two years. Nine months into this fiscal year, U.S. soup sales were down 5 percent.
Instead, it plans to launch new high-end soups and broaden its range of food choices. It plans to build a $30 million, 34,000-square-foot (3,160-sq. meter) "innovation center" for its Pepperidge Farm brand in Norwalk, Conn., where it will create new bakery and snack products. Campbell also plans to upgrade the Pepperidge Farm headquarters at the site, with construction finishing in fall 2012.
Food maker General Mills Inc., which owns rival soup brand Progresso, is to announce its plans for 2012 at an investor briefing Wednesday.
Campbell also plans to bring back some higher-sodium soups after working several years to reduce sodium, sometimes at the expense of flavor. And it plans to continue broadening its V8 juice line.
In another shift, Campbell, which is known for its red and white soup cans, plans to buy and partner with existing companies overseas, particularly in Asia and Latin America.
Campbell said it expects to earn about 1 percent more in the fiscal year that ends July 31 than it did in fiscal 2010, when its adjusted earnings were $2.47 per share. That's a more optimistic view than its earlier forecast for an adjusted earnings drop of 1 percent to 3 percent. The company still expects its revenue to be flat this year compared with last.
Analysts surveyed by FactSet predict 2011 earnings of $2.45 per share on revenue of $7.69 billion.
For fiscal 2012, Campbell expects adjusted earnings will decline 4 percent to 6 percent as it increases spending with revenue flat or rising as much as 2 percent. Analysts expect full-year earnings of $2.49 per share on revenue of $7.89 billion.
The soup maker gave a long-term outlook for annual adjusted earnings growth between 5 percent and 7 percent and a revenue increase in the range of 3 percent to 4 percent.
Morrison, 57, an executive with Campbell for eight years, will be the first woman to lead the company. Since she became chief operating officer and heir apparent to the CEO spot in September 2010, she has been examining the company's operations, and she's already made changes.
Two weeks ago, she announced a restructuring that includes eliminating 770 jobs from the company's worldwide workforce of 18,400, many through layoffs. She's also shuttering Campbell's operations in Russia; beefing up investment in Australia and closing a plant in Marshall, Mich.
She said the company would continue its fledgling effort to sell soup in China, which it launched along with the Russian effort four years ago.


Updated : 2021-06-25 03:25 GMT+08:00