Campbell Soup Co on Thursday posted quarterly profit below analysts' estimates despite strong sales of its V8 vegetable juice, as the company overhauled its supply chain in Australia and Indonesia.
Campbell also spent 15 percent more on marketing to help boost sales and said higher costs for meeting increased beverage volume cut into margins.
The largest U.S. soup maker said profit was $61 million, or 16 cents a share, in the fourth quarter ended July 29, compared with $44 million, or 11 cents a share, a year earlier. The fourth quarter is usually the lowest sales quarter for the company, since fewer people eat soup during the hot summer months.
Excluding one-time items, earnings from continuing operations were 14 cents a share, compared with 19 cents a share a year earlier. On that basis, analysts on average forecast 18 cents a share, according to Reuters Estimates.
Sales rose 9.6 percent to $1.59 billion.
The company, which also makes Pepperidge Farm baked goods and is considering the sale of its Godiva chocolate business, has seen sales helped by new products like lower sodium soup. The company is also expanding its soup business into China and Russia.
Like most food companies, Campbell has also raised prices to try to offset higher costs for ingredients like flour, oils and dairy products.
For fiscal year 2008, Campbell forecast a 5 percent to 7 percent increase in earnings per share from $1.95 in 2007, or $2.05 to $2.10 a share. Analysts on average forecast $2.14 a share, according to Reuters Estimates.
Campbell shares closed at $38 on Wednesday on the New York Stock Exchange. The stock is down 2.3 percent this year, compared with a 2.4 percent increase in the Standard & Poor's packaged foods index.