Campbell Soup on Tuesday reported quarterly earnings and revenue that beat analysts' expectations ahead of a key shareholder vote on its board next week.
Shares of the company jumped 6.8 percent Tuesday.
Campbell is locked in a proxy fight with activist firm Third Point, which wants to place five new directors on its board. The fight comes as Campbell has been working on a business turnaround, following a string of poor quarterly results. After a three-month review this summer, Campbell announced it is selling its fresh food and international snacks business, while focusing on revitalizing its core soup and domestic snack business.
"We continue to expect fiscal 2019 to be a transition year as we fully operationalize our plans to turn around Campbell," said interim CEO Keith McLoughlin.
In a statement, he said the company has begun to see improved trends in its U.S. soup business, return to sales growth in its V8 drink business and "continued solid performance" in its snack business, which includes Snyder's pretzels and Goldfish crackers.
Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 79 cents, adjusted, vs. 70 cents expected
- Revenue: $2.69 billion vs. $2.67 billion expected
Campbell reported fiscal first-quarter 2019 net income of $194 million, or 64 cents per share, down from $275 million, or 91 cents per share, a year earlier. Excluding items, Campbell earned 79 cents per share, beating the 70 cents per share expected by analysts surveyed by Refinitiv.
It said the impact of its acquisition of Snyder's-Lance and organic soup brand Pacific Foods were "neutral" to the company's adjusted earnings.
Net sales rose 25 percent to $2.69 billion, beating expectations of $2.67 billion.
Still, the company has challenges ahead.
Sales at its meals and beverages unit, which houses its namesake soup, dropped 5 percent after stripping out the impact of currency and acquisitions, driven largely by declines in U.S. soup, Prego pasta sauces and its Canadian business.
Sales at its fresh food business, which Campbell plans to sell, fell 1 percent to $232 million, led by declines in refrigerated soup, its Garden Fresh Gourmet salsa and its Bolthouse Farms smoothies.
Campbell has already begun to shop its Garden Fresh business, CNBC has reported, to see if it can expedite the sale of the unit.
The fresh food business posted an operating loss of $3 million, an improvement over its loss of $6 million a year earlier. Its Bolthouse Farm carrot business, meantime, also showed signs of progress, the company said.
The soup company reaffirmed its expectations for 2019. On Aug. 30, Campbell said without taking into account its planned sales, it expects adjusted earnings to be within a range of $2.45 to $2.53 per share. Assuming the divestitures, it expects a range of $2.40 to $2.50 a share.