(By Balachander) Campbell Soup Co. (NYSE: CPB) posted stronger-than-forecast quarterly results on soup sales growth and the company confirmed its earnings forecast for 2013.
"In our largest business, U.S. Simple Meals, we generated sales growth both in U.S. Soup and in U.S. Sauces, driven by innovation in our base business and by new product introductions," the Camden, New Jersey-based company said.
Adjusted earnings per share (EPS) increased 7.3 percent to 88 cents, and topped Wall Street projections of 85 cents. Net income attributable to the company fell 7.5 percent to $245 million as expenses rose and margins contracted.
[Related -A Pause In The Action]
Sales grew 8 percent to $2.33 billion, while market expectations called in for a 9.50 percent growth for the first quarter. Organic sales rose 1 percent.
Total costs and expenses increased 12 percent.
Gross margin shrank to 37.0 percent from 39.5 percent, mainly attributable to the acquisition of Bolthouse Farms.
Segment wise, sales at Campbell Soup's U.S. Simple Meals increased 3 percent with soup sales up 2 percent, while International Simple Meals and Beverages declined 1 percent. Global Baking and Snacking sales rose 1 percent. Sales of U.S. Beverages dropped 5 percent. Organic sales in North America Foodservice declined 6 percent.
Looking ahead for 2013, the company still forecasts adjusted EPS in the range of $2.51 to $2.57, on net sales growth between 10 and 12 percent. Analysts expect EPS of $2.54 on sales gain of 10.90 percent.
CPB closed Monday's regular trading at $36.95. The stock has been trading in the 52-week range between $31.22 and $37.16.