The Wall Street Journal-20080216-Earnings Digest- Campbell Soup Profit Slips 3-9-

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Earnings Digest: Campbell Soup Profit Slips 3.9%

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A WSJ News Roundup

Campbell Soup Co. posted a 3.9% drop in fiscal second-quarter profit, but it appeared confident it can offset rising ingredient costs with price increases and that soup will be a sought-after food even in a weak economy.

Campbell Soup reported net income of $274 million, or 71 cents a share, down from $285 million, or 72 cents a share, a year earlier. Revenue climbed 7.5% to $2.22 billion.

Meanhwile, J.M. Smucker Co.'s fiscal third-quarter rose 4.9%, but the jam and jelly maker also said margins took a hit from soaring commodity costs, particularly soybean oil and wheat.

Campbell said it will raise retail prices of soup, sauces and beverages in the U.S. by an average of 5% in coming months but the Camden, N.J., company stood by its full-year earnings outlook, reassuring investors, who bid up shares 6.1%.

Chief Executive Douglas R. Conant said a downturn in the overall economy shouldn't hurt the company. "This is the perfect recession food," he said.

"The soup business and overall portfolio was very healthy," said Mitchell Pinheiro, an analyst at Janney Montgomery Scott.

Last month, Campbell received antitrust clearance to sell its Godiva Chocolatier business for $850 million to Yildiz Holding of Turkey. Pepperidge Farm cookies now remain Campbell's only "indulgence" product. The rest of the company's fare, including low-sodium soups and V8 juice, has become increasingly focused on "wellness."

Smuckers reported net income of $42.4 million, or 75 cents a share, for the quarter ended Jan. 31, up from $40.4 million, or 71 cents a share, a year earlier. Revenue climbed 27% to $665.4 million.

In 4 p.m. New York Stock Exchange trading, Campbell shares were up $1.93 to $33.44. Smucker's shares rose $2.51, or 5%, to $50.26.