Campbell shares fell more than 4 percent in morning trading.
CHICAGO (Reuters) - Campbell Soup Co <CPB.N> posted lower quarterly operating earnings on Monday as U.S. soup sales fell and commodity costs rose, but net income jumped due to the sale of its Godiva chocolate business.
Campbell shares fell more than 4 percent in morning trading.
U.S. soup sales fell 3 percent, with a sharp decline in sales of ready-to-eat soups, as the company raised prices to offset soaring commodity costs. Analysts said the timing of the price increases exacerbated volume losses to General Mills Inc's <GIS.N> Progresso soups, though the price hike should help profit going forward.
The world's largest soup maker said profit was $532 million, or $1.40 a share, in its fiscal third quarter ended April 27, compared with $217 million, or 55 cents a share, a year earlier.
!ADVERTISEMENT!Excluding one-time items, the company earned 40 cents a share, falling short of analysts' average forecast of 44 cents, according to Reuters Estimates.
Campbell sold the Godiva business in March and recently sold its Australian salty snacks business. The company is also closing a plant in Canada as it looks to cut costs and focus on products like soup, Pepperidge Farm cookies and crackers and V8 juice.
Like most food makers, Campbell is raising prices to try to offset rising costs for everything from oil to wheat.
Quarterly sales rose 7.4 percent to $1.88 billion, though more than half of the increase was due to the weak dollar, which boosts the dollar value of overseas sales.
Sales for the U.S. soup, sauces and beverage division were nearly flat in the quarter, and operating profit fell 5 percent.
Baking and snacking sales rose 14 percent, though the division posted a $92 million operating loss due to restructuring charges.
International soup, sauces and beverages sales rose 17 percent, though operating profit fell 7 percent due to restructuring charges.
For the year, the company said it still expects earnings per share to increase 5 percent to 7 percent from the adjusted 2007 base of $1.95.
Campbell shares were down $1.50 to $34.45 on the New York Stock Exchange. The stock is down 2.6 percent this year, compared with a 2.5 percent increase for the Standard & Poor's U.S. packaged foods index.
(Reporting by Brad Dorfman; Editing by Steve Orlofsky and John Wallace)
