Campbell shares rise after earnings beat estimates under new CEO

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Credit: Andrew Harrer/Bloomberg

Campbell Soup Co.'s better-than-anticipated earnings marked a positive start for new CEO Mark Clouse, who took the helm at the very end of last quarter to attempt a turnaround of the company. The shares rose on Wednesday.

• Profit excluding some items amounted to 77 cents in the second quarter ended Jan. 27, the company said Wednesday, while analysts predicted 71 cents, on average. Net sales of $2.71 billion also topped estimates.

Key insights

• Clouse, who stepped into the role last month, said he's continuing with a plan to reduce costs and integrate the acquisition of Snyder's-Lance, the maker of Cape Cod and Kettle potato chips. Investors will be most interested in his strategy for rekindling growth as consumer tastes change.

• Clouse has plenty of packaged-food experience, after leading Pinnacle Foods and working at Mondelez International. But it remains to be seen if he can energize Campbell's main soup brand, which has lost appeal with many consumers.

• Campbell has already been overhauling some of its business. Following a strategy laid out in August, it's been looking to sell off its international and fresh-food divisions to focus on its core soups and snacks. On Tuesday it agreed to sell its Garden Fresh Gourmet brand, and last week it inked a deal to sell a refrigerated soup plant.

• At least Clouse can rest easier about Campbell's past proxy fight with activist investor Dan Loeb, which ended with an agreement in November. Loeb's firm Third Point got two seats on Campbell's board, expanding it to 14 members.

Market reaction

• The shares rose as much as 6.4 percent, the most in three months, to $35 on Wednesday. The stock has slumped 26 percent in the past year, at a time when the S&P 500 was little changed.

—Bloomberg News

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