Campbell Soup Company Earnings: Fifth Straight Quarter of Shrinking Margins as Net Income Falls

S&P 500 (NYSE:SPY) component Campbell Soup Company (NYSE:CPB) reported its results for the second quarter. Campbell Soup, with its consolidated subsidiaries, is a global manufacturer of convenience food products.

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Campbell Soup Company Earnings Cheat Sheet for the Second Quarter

Results: Net income for the processed and packaged goods company fell to $205 million (64 cents per share) vs. $239 million (71 cents per share) a year earlier. This is a decline of 14.2% from the year earlier quarter.

Revenue: Fell 0.7% to $2.11 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Campbell Soup Company beat the mean analyst estimate of 62 cents per share. Analysts were expecting revenue of $2.12 billion.

Quoting Management: Denise Morrison, Campbell’s President and Chief Executive Officer, said, “At the midpoint of our fiscal year, we are focused outward on consumers and on executing against our three strategies to return Campbell to sustainable, profitable net sales growth. As we said last July, implementing our new strategic direction will require substantial investment to fund brand-building efforts and a step change in innovation, particularly in U.S. Simple Meals. We are confident that these changes will position Campbell for future success.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell one percentage point to 38.4% from the year earlier quarter. Over that time, margins have contracted on average one percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 2 cents in the first quarter, by 6 cents in the fourth quarter of the last fiscal year, and by 5 cents in the third quarter of the last fiscal year.

The company has now seen net income fall in each of the last three quarters. In the first quarter, net income fell 5% from the year earlier, while the figure fell 11.5% in the fourth quarter of the last fiscal year.

Revenue has fallen in the past two quarters. In the first quarter, revenue declined 0.5% to $2.16 billion from the year earlier quarter.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 53 cents per share, down from 54 cents ninety days ago. The average estimate for the fiscal year is $2.36 per share, falling from $2.37 thirty days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com