Campbell Reports Third Quarter Results

Business Wire, May 19, 2008

Net Earnings Per Share Were $1.40, Including Gain from the Sale of Godiva.

Excluding Items Impacting Comparability, Adjusted Net Earnings Per Share Were $0.43.

Sales Increased 7 Percent.

CAMDEN, N.J. -- Campbell Soup Company (NYSE:CPB) today reported net earnings for the quarter ended April 27, 2008 of $532 million, or $1.40 per share, compared to $217 million, or $0.55 per share, in the year-ago period. The current quarter's reported net earnings included a gain from the sale of the Godiva business, partially offset by charges associated with previously announced restructuring initiatives. Excluding all items impacting comparability in both periods, adjusted net earnings were $165 million compared to $179 million in the prior year's quarter and adjusted net earnings per share were $0.43 in the current quarter compared to $0.45 in the year-ago period.

A detailed reconciliation of the adjusted fiscal 2008 and 2007 financial information to the reported information is attached to this release.

On March 18, 2008, Campbell completed the sale of the Godiva business, the results of which are reported as discontinued operations for all periods. Additionally, in the third quarter, Campbell recorded restructuring charges related to previously announced initiatives to improve operational efficiency and enhance long-term profitability, including the sale of certain salty snack foods brands and assets in Australia, the closure of production facilities in Australia and Canada, and the streamlining of its management structure.

The current and prior quarter's net earnings included items that impacted comparability. These items are summarized below:

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In the third quarter, earnings from continuing operations were $54 million compared to $210 million in the prior year. Earnings per share from continuing operations for the current quarter were $0.14 compared to earnings per share of $0.53 in the year-ago period. Excluding items impacting comparability in both years, adjusted earnings from continuing operations in the third quarter were $154 million compared to $172 million in the year-ago period. Adjusted earnings per share from continuing operations were $0.40 compared to $0.44 in the prior-year period.

Earnings from discontinued operations for the quarter were $478 million compared to $7 million in the prior-year period. The current quarter included a $707 million pre-tax gain, $467 million after tax, or $1.23 per share, related to the sale of the Godiva business. Excluding the gain on the sale, adjusted earnings from discontinued operations were $11 million, or $0.03 per share, compared to $7 million, or $0.02 per share, a year ago.

For the third quarter, sales increased 7 percent to $1.880 billion. Sales growth for the quarter reflects the following factors:

* Volume and mix added 1 percent

* Price and sales allowances added 3 percent

* Increased promotional spending subtracted 1 percent

* Currency added 4 percent

Douglas R. Conant, Campbell's President and Chief Executive Officer, said, "We delivered solid sales growth in the quarter across many of our businesses, including beverages, baking and snacking, and international. However, in U.S. soup, as anticipated, we had a difficult third quarter as we were lapping a very strong quarter a year ago and we took significant pricing actions to address the dramatic increases in cost inflation. While third quarter adjusted net earnings were below last year, we anticipate a strong finish to our fiscal year. Looking ahead to next year, we have plans in place both in terms of new products, especially lower sodium varieties, and marketing programs that we believe will enable us to continue to grow our U.S. soup business."

Conant continued, "Looking at our broader portfolio, we continued to have strong results in several key businesses. In healthy beverages, our U.S. beverage business again delivered double-digit sales growth. In baked snacks, both Pepperidge Farm and Arnott's also had very solid sales gains. Our international businesses delivered improved sales performance and we continue to be encouraged by the early results in our emerging markets of Russia and China. Finally, with the sale of Godiva and our recent actions to improve operational efficiency and exit underperforming businesses in Australia, we have further sharpened our focus on simple meals, baked snacks, and healthy beverages. We believe this increased focus positions us well for long-term, profitable growth."

Consistent with its previous guidance, Campbell expects adjusted net earnings per share growth between 5 and 7 percent from the fiscal 2007 adjusted base of $1.95.

The current and prior period's net earnings included items that impacted comparability. These items are summarized below:

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Net earnings for the nine months of fiscal 2008 were $1.076 billion, or $2.79 per share, compared to $793 million, or $1.99 per share, in the year-ago period.

Excluding items impacting comparability, adjusted net earnings were $701 million compared to $718 million in the year-ago period. Adjusted net earnings per share were $1.82 in the current period compared to $1.80 in the prior period, an increase of 1 percent.