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Campbell Soup, Slack earnings — What to know in markets Wednesday

Heidi Chung
Reporter

Campbell Soup (CPB) and Slack (WORK) will be delivering quarterly results Wednesday.

Ahead of the opening bell, Campbell Soup is expected to report fiscal first-quarter adjusted earnings of 71 cents per share on $2.19 billion in revenue, according to analysts polled by Bloomberg.

Campbell’s previously struggling soup business started to show signs of life when the company reported fiscal fourth quarter results August 30. U.S. soup sales rose 3%. The company introduced new soup recipes with added chicken and tomatoes and eliminated preservatives to draw in health-conscious customers. Campbell’s snack business also grew 3% during the fourth quarter. The soup giant’s recently acquired Snyder’s Lance has been helping its snacks portfolio.

Analysts are expecting Campbell’s soups sales to have stabilized further and the snacks business to have risen mid-single digits during Q1. Campbell’s divestitures are anticipated to be completed in the first half of 2020.

Though Campbell’s has been improving its business, the company isn’t expected to see consistent sales growth until 2021. In late 2018, Campbell’s was entangled in a bitter proxy battle with Third Point. Activist investor Dan Loeb wanted to replace the entire board of the company but eventually agreed to just 2 board seats in November. 

Campbell’s shares soared 48% in 2019 and have outpaced the S&P 500’s (^GSPC) 26% gain during the same time period.

Slack Technologies Inc. co-founder and CEO Stewart Butterfield poses outside the New York Stock Exchange (NYSE) during thew company's IPO in New York, U.S. June 20, 2019. REUTERS/Brendan McDermid

Meanwhile, after the closing bell, recent IPO Slack is scheduled to release third quarter financial results. Wednesday’s announcement will be the second for Slack since its debut on the public markets. The online messaging platform opted to direct list and starting trading on the New York Stock Exchange in June.

Slack stock has tumbled 17% from its reference price of $26 per share, and like its recent IPO peers is not yet a profitable company.

Analysts expect Slack’s billing and sales growth outlook to remain pressured in the near term. Competition from larger rivals like Microsoft (MSFT) is another major concern for Slack. Nevertheless, Slack revealed that it added more large customers during its second quarter. Those large customers contribute over $100,000 of annual recurring revenue.

The company continues to focus on high growth and expansion. It has sacrificed profit to aggressively add new customers. Analysts surveyed by Bloomberg expect Slack to report a third-quarter adjusted loss of 8 cents per share on $156.23 million in revenue. The options market is implying a 16% move in either direction following the announcement.

Some key economic announcement scheduled for Wednesday include: MBA Mortgage Applications, week ended November 29 (1.5% prior); ADP Employment Change, November (140,000 expected, 125,000 in October); Markit U.S. Services PMI, November final (51.6 expected, 51.6 prior); Markit U.S. Composite PMI, November final (51.9 prior); ISM Non-Manufacturing Index, November (54.5 expected, 54.7 in October).

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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