Upcoming AWS Coverage on Ingredion Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 2, 2016 / Active Wall St. announces its post-earnings coverage on Campbell Soup Co. (NYSE: CPB). The company released its first quarter fiscal 2017 (Q1 FY17) earnings on November 22, 2016. The world's largest soupmaker surpassed top- and bottom-line expectations, supported by cost-saving initiatives and lower commodity prices. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Campbell Soup's competitors within the Processed & Packaged Goods space, Ingredion Inc. (NYSE: INGR), reported on November 02, 2016, its results for Q3 2016. AWS will be initiating a research report on Ingredion in the coming days.

Today, AWS is promoting its earnings coverage on CPB; touching on INGR. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=CPB

http://www.activewallst.com/registration-3/?symbol=INGR

Earnings Reviewed

For the three months ended on October 30th, 2016, Campbell Soup reported net income of $292 million, or $0.94 per share, up from $194 million, or $0.62 per share, in the year-earlier period. Excluding certain items, the company earned $1.00 per share in Q1 FY17, beating analysts' estimate of $0.95 per share. Campbell Soup's Q1 FY17 sales edged down to $2.202 billion from $2.203 billion, but were also ahead of the market estimates of $2.198 billion. The company's organic sales fell 1% due to decline in Campbell Fresh, partially offset by gain in Global Biscuits and Snacks.

Segment Results

During Q1 FY17, sales from Campbell Soup's Americas Simple Meals and Beverages segment were comparable to the prior year at $1.297 billion, with gains in Plum products offset by declines in V8 beverages. Sales of U.S. soup were comparable to the prior year with gains in ready-to-serve soups and broth offset by modest declines in condensed soups. During the reported quarter, the segment's operating earnings increased 6% on a y-o-y basis to $383 million. For the company's Global Biscuits and Snacks division, sales improved 3% to $671 million. Excluding the favorable impact of currency translation, the segment's sales increased 1%, primarily driven by gains in Pepperidge Farm. The segment's operating earnings decreased 2% to $112 million during the reported quarter.

During Q1 FY17, the Company's Campbell Fresh unit reported a 6% decline in sales to $234 million primarily driven by lower sales of Bolthouse Farms refrigerated beverages and carrots, partly offset by gains in refrigerated soups. The segment's operating earnings decreased from $18 million to $1 million reflecting increased carrot and beverage supply chain costs, as well as lower sales volumes. Sales and operating earnings of Campbell Fresh were negatively impacted by the continuation of supply constraints related to the voluntary recall of Bolthouse Farms Protein PLUS drinks in June 2016, as well as lower carrot sales.

Margin

During Q1 FY17, Campbell Soup's gross margin increased to 38.2% in Q1 FY17 from 34.3% in Q1 FY16. Excluding items impacting comparability, adjusted gross margin increased 1.2 basis points from 37.9% in the year earlier period to 39.1% in the reported quarter, primarily attributed to gross margin expansion in Americas Simple Meals and Beverages. Overall, the increase in adjusted gross margin was primarily driven by productivity improvements and the benefits from cost savings initiatives, partly offset by cost inflation, and increased carrot and beverage supply chain costs within Campbell Fresh. Furthermore, the company's supply chain productivity programs, which are incremental to its $300 million cost-savings program, contributed 170 basis points of margin improvement in the reported quarter.

Balance Sheet

During Q1 FY17, Campbell Soup's cash flow from operations decreased to $221 million from $244 million a year ago primarily due to lower cash earnings and higher working capital requirements. The company adopted a new accounting standard that impacts the recognition of excess tax benefit on stock-based compensation. The tax rate for Q1 FY17 reflected a $6 million tax benefit related to the change.

During Q1 FY17, Campbell Soup's Capital expenditures declined $23 million to $48 million. The company paid dividends totaling $100 million reflecting a quarterly dividend rate of $0.312 per share. In September 2016, Campbell Soup announced an increase in the quarterly dividend rate to $0.35 per share.
On aggregate basis, Campbell Soup repurchased $112 million of shares, $100 million of which were under its strategic share repurchase program. The company stated that its net debt declined by $522 million compared to year-ago levels as cash from operations over the last four quarters was well in excess of capital expenditures, dividends, and share repurchases. Campbell Soup noted that on its cost-savings program, the company was ahead of expectations having generated $35 million in Q1 FY17 against FY17 estimate of $50 million.

Earnings Outlook

For FY17, Campbell expects sales to increase by 0-1%, adjusted EBIT to increase by 1% to 4 %, and adjusted earnings to grow by 2% to 5%, or $3.00 to $3.09 per share.

Stock Performance

Campbell Soup's share price finished yesterday's trading session at $57.15, slightly up 0.46%. A total volume of 2.44 million shares exchanged hands, which was higher than the 3 months average volume of 2.26 million shares. The stock has advanced 10.88% in the past twelve months. Furthermore, since the start of the year, shares of the company have gained 11.18%. The stock is trading at a PE ratio of 26.91 and has a dividend yield of 2.45%.

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SOURCE: Active Wall Street