Campbell Soup Reports Income Fell 5% In 3Q Sending Shares Down

Campbell Soup Co. (NYSE: CPB) reported third-quarter net income fell 5 percent to $177 million, or 55 cents per share, as revenue stayed flat at $1.82 billion in its third quarter ended April 29. It was the third consecutive quarter the soup giant reported an earnings fall.

A decline in U.S. and international sales of its simple meals, a drop in global sales of beverage products, a rise in the cost of ingredients and an increase in marketing spending were attributed to the 2-cent decline in EPS from the same quarter last year.

We are not satisfied with our performance this quarter, said CEO Denise Morrison. We executed well in some businesses, delivering solid sales growth in U.S. Beverages, Pepperidge Farm and Canada. We did not execute as well in others.

Analysts polled by Thompson Reuters had expected the Camden, N.J.-based company to report earnings of 52 cents on revenue of $1.82 billion

While Campbell's sales of soups and broths fell, sales of its Prego pasta sauces increased about 3 percent. Baked goods and snacks sales grew 3 percent, led primarily by a price increase in the company's Pepperidge Farm products, but operating income for the division fell to $73 million from $82 million due to a rise in the cost of commodities and promotion. The cost of ingredients whittled the company's gross margin to 38.8 percent from 40.4 percent a year ago.

Campbell didn't change its fiscal 2012 guidance: it still expects sales growth to be flat or to rise 2 percent, with per-share earnings between $2.35 and $2.42, compared with fiscal 2011 adjusted eranings of $2.54, according to Reuters.

Shares of Campbell fell 65 cents to $32.75 by closing bell Monday, in the middle of its 52-week trading band.

Campbell has a market cap of $10.2 billion. Major competitor H. J. Heinz Company (NYSE: HNZ) will release its quarterly earnings on Thursday when it' expected to announce higher revenue and but not no surprises earnings surprises for the quarter or full year..