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Campbell Soup Company Message Board

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  • bluecheese4u bluecheese4u Nov 23, 2009 8:57 AM Flag

    Campbell Reports First-Quarter Results

    part two

    First-Quarter Results
    For the first quarter, sales decreased 2 percent to $2.203 billion. The change in sales for the quarter reflected the following factors:

    •Volume and mix subtracted 4 percent
    •Price and sales allowances added 2 percent
    •Increased promotional spending subtracted 1 percent
    •Currency added 1 percent
    First-Quarter Financial Details

    •Gross margin was 41.9 percent compared with 38.7 percent a year ago. The prior year included $26 million of unrealized losses on commodity hedges and $7 million of costs related to initiatives to improve operational efficiency and long-term profitability. After adjusting for these items, gross margin in the year-ago quarter was 40.2 percent. The increase in gross margin was primarily due to productivity improvements and pricing, net of promotional spending, in excess of cost inflation.
    •Marketing and selling expenses decreased to $284 million compared with $307 million in the prior year, which included significant advertising costs associated with major soup initiatives. Lower advertising costs also reflected a reduction in media rates and a shift to trade promotion.
    •Administrative expenses decreased to $133 million from $140 million, reflecting cost reduction efforts and lower incentive compensation costs, partly offset by higher pension expense.
    •Earnings before interest and taxes (EBIT) were $478 million compared with $399 million in the prior-year quarter. Excluding items impacting comparability, adjusted EBIT in the prior-year quarter was $432 million. Adjusted EBIT increased 11 percent primarily due to improved gross margin performance and lower marketing expense, partly offset by lower sales.
    •Cash flow from operations was a use of $36 million compared with a use of $15 million in the year-ago period. The current year cash flow reflected a $260 million contribution to Campbell's U.S. pension plan, largely offset by improvements in working capital.
    •During the quarter, Campbell repurchased 3 million shares for $94 million under its June 2008 strategic share repurchase program and the company's ongoing practice of buying back shares sufficient to offset those issued under incentive compensation plans.

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