MOUNT LAUREL, N.J. (AP) -- The Campbell Soup Co., hurt lately by rising ingredient prices and a strong U.S. dollar but boosted by shoppers looking for cheap meals, is expecting a more stable economy -- and more conventional soup-selling challenges.
The Camden-based company reported Friday that its fourth-quarter net income fell 22 percent, but stronger soup sales helped its profit rise 11 percent excluding one-time items.
The world's largest soupmaker reported that it earned $69 million, or 20 cents per share, for the three months ended Aug. 2. That's down from $89 million, or 24 cents per share, in the same period a year ago.
Excluding one-time items such as commodity hedging and a charge related to European trademarks, profit was $107 million, or 30 cents a share.
The performance was better than analysts expected: The consensus among those surveyed by Thomson Financial was that earnings would be 26 cents per share.
Campbell officials said revenue benefited from price increases put in place early in 2009 in response to commodity prices that had risen quickly over the past few years.
They also said that their place as a value item helped, with improved sales for its condensed soups, which have high profit margins, and also most ready-to-serve soups, broths and pasta sauces.
Consumer bargain-hunting hurt the company on some fronts, though. Sales fell for more expensive products like V-8 juices, Pepperidge Farm breads and soups sold in microwavable bowls.
The quarter helped the company do better than it projected just a few months ago, when officials said they would hit their long-term, full year goal of increasing profit by 5 to 7 percent only if the negative impact of the strong U.S. dollar was factored out.
Instead, the company hit that goal including the effects of currency. A stronger dollar means that overseas revenue translates back into fewer dollars.
Sales for the quarter were $1.53 billion, down from $1.7 billion in the year-ago period.
For the fiscal year, the profit was $736 million, of $2.06 per share, on sales of $7.6 billion. A year ago, earnings were $1.17 billion, or $3.06 per share, on sales of $8 billion.
Adjusted for comparability, though, the company said that the most recent fiscal year was stronger, with a profit of $794 million, or $2.22 per share in 2009, compared with a profit of $797 million, or $2.09 per share, the previous year.
Soup sales for the year were up 5 percent.
For fiscal 2010, the company said it expects adjusted earnings growth for the new fiscal year of 5 percent to 7 percent -- the same as its long-term target for the past few years. The company said it expects higher profit margins. But it projects it will take a hit as it pays more into its pension fund.
Campbell CEO and President Douglas Conant said the expects revenue growth this year to come more from higher sales and less from increased prices.
He said the company also expects inflation on its input costs to be only around 1 to 2 percent.
Jack Russo, an analyst who follows Campbell and other food companies for Edward Jones, said he thought those projects were right.
"We should see some normalization of commodities," he said. "I think it's going to get back to business as usual."
In morning trading Friday, Campbell shares fell 10 cents to $33.02.