Campbell Soup Company (NYSE: CPB) is scheduled to report Q4 earnings on Friday, September 11, 2009.
In the quarter ending April 2009 (Q3), Campbell Soup reported net earnings of $174 million, or $0.49 per share, compared to $532 million, or $1.40 per share, in the prior year. Adjusted net earnings per share were $0.48 in the third quarter compared to adjusted net earnings per share of $0.43 in the prior year's quarter, an increase of 12%. The company's stock price rose by $1.45 to $28.24 two days after the earnings announcement. In the last four quarters, the company's reported earnings exceeded the analysts' consensus.
The company forecasted in July that its full-year profit would grow more than 5% to 7%, excluding the impact of foreign currency exchange. Analysts' estimates for the quarter ending July 2009 (Q4) range from a low of $0.23 to a high of $0.28, with a consensus of $0.261. For the quarter ending July 2009, the consensus EPS forecast has remained the same over the past week at $0.261 and increased over the past month from $0.260 to $0.261 (0.38%). Of the 15 analysts making quarterly forecasts, 1 raised and none lowered their forecast.
Generally Campbell Soup reports weakest sales in the fourth quarter and it will be no different this time as well. Since the recession began, private label has become a major threat, biting into food earnings among companies like Kellogg (NYSE: K), Kraft (NYSE: KFT) and Campbell. Given that the fourth quarter produces just 10% to 15% of Campbell's annual profit, the focus on Friday will be on the outlook for new products.
Campbell is still seeing volume and sales growth in condensed soups, where it holds 80 percent of the market. However, revenue could suffer from the quarter being one week short and from other branded bakers offering promotions.
Though the company's growth rate (3.8%) in the July ending quarter is lower than the growth being reported (8.82%) by food processing industry, over the next five years, the company is expected to grow earnings at an average annual rate of 8.0%. Currently, the stock is trading at $32.36 (15.71x 2010 EPS), compared to the 52 week range of $24.63 -$40.85. By end 2009, the stock price could go up to $33.
