Campbell Reports Q2 Profit

NEW YORK - Feb 15/08 - SNS -- Campbell Soup Company reported net earnings of $274 million on sales of $2,218 million for the second quarter ending for the quarter ended January 27, compared to a net of $285 million last year.

This lifted net earnings for the first half of the current fiscal year to $528 million on sales of $4,403 million, compared to a net of $524 million for the same six month period last year.

The company said gross margins decreased to 40.1% from 41.2% in the prior year. The decline was primarily due to cost inflation and higher promotional spending, which were only partially offset by productivity gains and higher selling prices. Marketing and selling expenses increased $19 million to $319 million, primarily due to higher advertising expenses and currency.

Sales for U.S. Soup, Sauces and Beverages were $1.093 billion, an increase of 6% compared to a year ago. Sales of "Campbell's" condensed soups declined 1%, driven primarily by a decline in cooking varieties. The company recorded sales gains in "Campbell's Healthy Request" and lower sodium condensed soups.

Sales of ready-to-serve soups increased 8%. Sales increases in "Campbell's Chunky" and "Campbell's Select" canned soups were partially offset by declines in convenience products, which include soups in microwavable bowls and cups. Sales of "Campbell's Chunky" canned soups benefited from the launch of "Campbell's Chunky" Fully Loaded soups, while sales of "Campbell's Select" soups increased due to higher advertising and promotions.

Beverage sales increased double digits due to growth in "V8 V-Fusion" juice and "V8" vegetable juice. The introduction of new varieties helped drive "V8 V-Fusion" juice sales, and "V8" vegetable juice benefited from gains in low sodium varieties. Sales of "V8 Splash" juice drinks also increased in the quarter.

"Prego" pasta sauce sales increased slightly, and sales of "Pace" Mexican sauces increased strongly primarily due to the introduction of a new line of specialty salsas.