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Campbell Soup's profit dips as company repositions

Associated Press Modified: November 20, 2012 at 1:30 pm •  Published: November 20, 2012

For the period ended Oct. 28, the company said it earned $245 million, or 78 cents per share, for the quarter that ended Oct. 28. That compares with $265 million, or 82 cents per share, a year ago. Not including one-time items related to its acquisition of Bolthouse Farms and the plant closings, Campbell said it earned 88 cents per share.

Net sales rose 8 percent to $2.34 billion.

Analysts on average expected a profit of 85 cents per share on sales of $2.36 billion, according to FactSet.

Sales for Campbell's snacks and baked goods unit rose 1 percent to $574 million, as Goldfish crackers and new Jingos crackers sales offset a decline in cookies and baked goods. Sales for the beverage unit fell 5 percent to $189 million, due to a decrease in sales of V8 vegetable and V8 V-Fusion juices. The company said it's focusing on growing categories, such as energy and children's drinks.

Marketing and selling expenses in the quarter decreased 3 percent to $254 million, in line with the company's plans to scale back on U.S. soup advertising. Campbell said the decrease is a reflection of other measures it's taking, such as upgraded packaging and in-store promotions.

But Ken Goldman, an analyst for J.P. Morgan, noted that growing a business is difficult when marketing dollars are cut. He also noted that it was the lowest level of marketing as a percent of sales for Campbell since at least 1997.

Campbell stood by its projections for 2013, with earnings expected to be between $2.51 per share and $2.57 per share. Sales are expected to grow 10 percent to 12 percent, primarily because of its acquisition of Bolthouse Farms. Goldman noted that Campbell will need to deliver a strong performance for the rest of the year to meet that target.

Shares of Campbell were down about 2 percent at $36.08.