Campbell Soup Raises Earnings Guidance as Synder’s-Lance Acquisition Supports Third Quarter Beat

Campbell Soup (CPB) raised its guidance for full-year earnings on Wednesday as it posted better-than-expected results for the fiscal third quarter, which was buttressed by its acquisition of salty snacks maker Synder’s-Lance last year.

The Camden, NJ-based company, which was founded in 1869 and makes snacks, soups and simple meals, reported total combined company sales of $2.39 billion in the three months ended April 28. This was up 12% from the corresponding quarter of the prior year and it surpassed the consensus estimate of analysts polled by Capital IQ for $2.35 billion.

The company said the total sales reflected a 15-point benefit from the acquisition of Snyder’s-Lance in March 2018, which was made for an enterprise value of approximately $6.1 billion.

Adjusted earnings per share came in at $0.56, down from $0.70 a year earlier but ahead of the Street’s forecast for $0.47.

Mark Clouse, Campbell’s chief executive, said that the results were ahead of the company’s expectations, making it the third consecutive quarter in which it had met or exceeded its outlook.

“In the quarter, we continued to drive sales growth in Global Biscuits and Snacks, fueled by our US Snacks portfolio,” Clouse said. “The business continues its growth trends on Pepperidge Farm, coupled with improvements in the Snyder’s-Lance portfolio.”

In the Meals and Beverages segment, Clouse said that it is “making steady improvements on gross margin and profit and this business is showing signs of stabilization.”

For the full year, the company is targeting adjusted net earnings per share of $2.50 to $2.55 compared with earlier guidance for $2.45 to $2.53. Sales guidance was revised down slightly to $9.075 billion to $9.125 billion compared with a prior projection for $9.975 billion to $10.1 billion.

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