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Food & Beverage

Campbell Soup shares rise after beating profit estimates on cost cuts

Key Points
  • Net sales from continuing operations rose 2% to $1.78 billion compared to the year-ago quarter.
  • Campbell has been streamlining its operations by disposing its international and fresh businesses, including Bolthouse Farms and Garden Fresh Gourmet salsa.
  • Last month Campbell said it would sell Kelsen Group, a unit known for Royal Dansk cookies, to a Ferrero affiliated company for $300 million.
Cans of Campbell Soup Co. Campbell's chicken noodle and tomato soup.
Andrew Harrer | Bloomberg | Getty Images

U.S. food company Campbell Soup reported better-than-expected fourth-quarter profit, benefiting from cost cuts, sending shares up 5% before the bell.

To better focus on its mainstream soup and snack businesses, Campbell has been streamlining its operations by disposing its international and fresh businesses, including Bolthouse Farms and Garden Fresh Gourmet salsa.

Last month Campbell said it would sell Kelsen Group, a unit known for Royal Dansk cookies, to a Ferrero affiliated company for $300 million. It is also selling its Arnott's biscuits and some of its international operations.

The company has introduced new soup recipes with added chicken and tomatoes and eliminated preservatives to also draw in health-conscious customers.

For the quarter ended July 28, Campbell earned 42 cents, excluding items, beating Wall Street estimates by 1 cent, according to Refinitiv.

Net sales from continuing operations rose 2% to $1.78 billion compared to the year-ago quarter.

However, the company recorded a net loss attributable to its shareholders of $8 million, or 3 cents per share, compared with a profit of $94 million, or 31 cents per share.

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Economy

US consumer spending increases solidly; income tepid

Key Points
  • The Commerce Department said on Friday consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.6% last month after an unrevised 0.3% gain in June.
  • Consumer spending in July was supported by savings as personal income edged up 0.1%, the smallest rise since last September. That followed a 0.5% increase in June.
  • Wages increased 0.2% and personal interest income fell 1.8%. Savings fell to $1.27 trillion, the lowest level since November 2018, from $1.32 trillion in June.