Campbell Soup Co., the world's largest soup maker, reported weak quarterly sales as higher prices at its U.S. soup and international businesses put off price-conscious shoppers, sending its shares down 5 percent.
The company, whose U.S. soup business has struggled with more competition, said quarterly sales in that business fell 4 percent, hurt by higher promotional spending by rivals, while sales in its international business decreased 3 percent.
Campbell, which named Denise Morrison as its new chief executive in June, has cut jobs and promotional spending and quit the Russian market to boost earnings.
In the first quarter, the company reported a higher-than-expected profit, helped by a lower advertising and promotion expenses, and stood by its forecast for the fiscal year.
Campbell, which also makes V-8 juice drinks and Pepperidge Farm Goldfish crackers, began advertising later than usual "to be more closely aligned with the start of the soup season."
"We consider the quality of this quarter's earnings to be low," said KeyBanc Capital Markets analyst Akshay Jagdale.
For the quarter ended Oct. 30, net earnings attributable to Campbell Soup were $265 million, down from $279 million a year earlier. Per share earnings were unchanged at 82 cents due to a decline in outstanding shares.
Sales fell 1 percent to $2.16 billion.
Analysts on average were expecting a profit of 79 cents a share on sales of $2.21 billion, according to Thomson Reuters I/B/E/S.
Marketing and selling expenses fell 6 percent to $261 million.
Campbell expects fiscal 2012 adjusted earnings per share to fall 5 to 7 percent, with sales flat to up 2 percent.
Shares of the company were down 5 percent at $31.85 Tuesday on the New York Stock Exchange.
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