CAMDEN, N.J. (AP) — Campbell Soup's net income rose 27 percent in its fiscal fourth quarter as retailers ran promotions to warm up soup sales and stocked up on inventories. The results beat Wall Street expectations and the company issued a rosier outlook for its fiscal 2013.
Its stock climbed 4 percent in premarket trading.
The Camden, N.J., company said Tuesday that it earned $127 million, or 40 cents per share, for the period ended July 29. In the year ago period — when the company was weighed down by restructuring charges — it earned $100 million, or 31 cents per share.
Stripping out acquisition-related costs in the latest quarter, earnings were 41 cents per share. Analysts surveyed by FactSet expected 39 cents per share.
Revenue was basically flat at $1.61 billion, but beat Wall Street's $1.59 billion estimate.
Sales of simple meals — which includes sauces, soup and broths — rose 7 percent in the U.S. during the quarter, with soup sales gaining 9 percent. That marked the first increase since the third quarter of 2010 and the largest increase since the first quarter of 2009.
But the gain is not a clear-cut sign that Campbell is turning around its soup business, which has faltered over the past several years. The company attributed the increase sales of condensed soups in part to retailers running promotions. Retailers also stocked up on inventories, which the company says were lower than a year-ago at the start of the quarter.
Condensed soup sales rose 14 percent and broth sales climbed 4 percent. Sales of ready-to-serve soups edged up 1 percent, with sales of "Chunky" soups up slightly.
The company said its new Slow Kettle soups, launched a year ago, also contributed to sales growth.
Sales of sauces rose 4 percent in the U.S. on improved sales of Prego pasta sauces and Pace Mexican sauces. Sales for U.S. beverages climbed 3 percent, led by increased sales of "V8 Splash" and better sales of "V8 V-Fusion."
The global baking and snacking segment reported a 1 percent decline in sales, with sales of frozen products falling. Sales of Pepperidge Farm products and Goldfish snack crackers were strong.
North American foodservices sales dropped 3 percent, while sales of international simple meals and beverages fell 7 percent partly because of unfavorable foreign exchange rates.
Gross margin declined mostly because of higher costs and increased promotional spending. The company said that this was somewhat offset by higher selling prices and productivity improvements.
For the full year, Campbell Soup Co. earned $774 million, or $2.41 per share, down from $805 million, or $2.42 per share, in the previous year. Annual revenue dipped slightly to $7.71 billion from $7.72 billion.
For fiscal 2013, Campbell foresees adjusted earnings of $2.51 to $2.57 per share. Revenue is expected to climb 10 percent to 12 percent, implying a range of $8.48 billion to $8.64 billion.
Wall Street expects earnings of $2.52 per share on revenue of $8.47 billion.
The company's shares rose $1.41, or 4 percent, to $36.55 in premarket trading.