Campbell Soup Lifts 2011 Profit Outlook

Campbell Soup is raising its fiscal 2011 adjusted earnings outlook, but the world's largest soup maker provided a somewhat disappointing forecast for next year.

Campbell's Soup
Lisa Poole
Campbell's Soup

The guidance was offered as Campbell was preparing to hold an important meeting with a group of analysts on Tuesday, during which incoming president and CEO Denise Morrison plans to lay out her vision for the food company.

Morrison will take the helm at Campbell on Aug. 1, when Douglas Conant is stepping down from the job after more than a decade.

Campbell, known for its iconic red and white soup cans, said that it anticipates fiscal 2011 adjusted earnings will rise about 1 percent from 2010 adjusted results of $2.47 per share. Its prior guidance was for adjusted earnings to fall 1 percent to 3 percent.

Revenue is still expected to be essentially flat.

Analysts surveyed by FactSet predict 2011 earnings of $2.45 per share on revenue of $7.69 billion.

Shares of the Camden, N.J. company added 9 cents to $34.23 in morning trading.

For 2012, Campbell foresees adjusted earnings will decline 4 percent to 6 percent, with revenue flat to up 2 percent.

Analysts expect full-year earnings of $2.49 per share on revenue of $7.89 billion.

The soup maker gave a long-term outlook for annual adjusted earnings growth between 5 percent and 7 percent and a revenue increase in the range of 3 percent to 4 percent.

In a statement, Campbell said its new business strategy will include concentrating on expanding its simple meals, baked snacks and healthy beverage segments as well as boosting its presence in emerging markets.

Morrison, 57, will be the first woman to lead Campbell and has been an executive with the company for eight years. She became heir apparent to the CEO position in September 2010.

Since then, as chief operating officer, she has been examining the company's operations and already has announced some major changes.

Two weeks ago, she announced a restructuring plan. It includes eliminating 770 jobs from the company's worldwide workforce of 18,400, many of them through layoffs; shutting down its operations in Russia; beefing up investment in Australia and closing a manufacturing plant in Marshall, Mich.

She said the company would keep in place its fledgling effort to sell soup in China, which launched along with the Russian effort four years ago.

After Conant took over in 2001, he reversed the long-term erosion of sales of the company's iconic condensed soups. One factor was an effort led by Morrison to reduce sodium levels. He also sold its Godiva Chocolatier operation and focused more on foods that can be marketed as healthy.

Conant, who took pride in regularly writing thank-you notes to employees and others, agreed to keep the company's headquarters in beleaguered Camden, N.J., and expanded its corporate campus there.

In addition to soup, Campbell sells V8 juices, a line expanded under Conant; Pepperidge Farm cookies, crackers and bread; Prego pasta sauces and Spaghettio's canned pasta.

But soup, which has high profit margins, remains its key business, and it has been struggling, with sales falling each of the last two years.

Already in the first three quarters of Campbell's fiscal year 2011, its U.S. soup sales fell 5 percent.

Myriad problems have been at play, including cost increases for everything from soup ingredients to packaging material. Then, after a raft of promotions, the company was selling lots of soup, but for less money.

General Mills , which owns rival soup brand Progresso, plans to announce its plans Wednesday.