Campbell Soup Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Campbell Soup (NYSE: CPB  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk reaction to news that turns out to be exactly the wrong move.

Campbell Soup isn't the most glamorous, exciting company in the market, but it has quietly been hitting new multiyear highs lately. Let's take an early look at what's been happening with Campbell Soup over the past quarter and what we're likely to see in its quarterly report on Friday.

Stats on Campbell Soup

 

 

Analyst EPS Estimate

$0.66

Change From Year-Ago EPS

3.1%

Revenue Estimate

$2.32 billion

Change From Year-Ago Revenue

9.8%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Will Campbell Soup keep heating up?
Analysts have cut their estimates on Campbell a bit over the past three months, with a $0.03 cut in consensus earnings per share. Yet that hasn't held the stock back at all, with gains of more than 8% just since mid-November.

Campbell has performed extremely well lately, but it's had to overcome some headwinds in its space, as food inflation has increased the cost of ingredients it needs to make its namesake soups. That's been a huge problem in the packaged-food space, as General Mills (NYSE: GIS  ) and Kraft Foods (NASDAQ: KRFT  ) have both seen margin pressure come from high input costs despite their respective brand strength. Campbell has also had to deal with a general consumer trend away from soup, although a harsh flu season may have turned around the company's prospects at least this quarter.

Longer term, Campbell has seen a number of initiatives it began last year start to take root. Its purchase of Bolthouse Farms last summer helped the company diversify away from its mainstay soup offerings with exposure to fresh juices and vegetables. Meanwhile, layoffs announced in September will take place over the ensuing year and should lead to substantial cost savings.

One interesting growth avenue that Campbell took during the quarter was to make a flavoring deal with SodaStream (NASDAQ: SODA  ) to provide V8 Splash and V-Fusion syrups for the carbonated beverage system. The move lends Campbell's reputation to SodaStream and could help improve brand awareness for V8 store products as well, boosting both companies.

In Campbell Soup's report, watch for signs of where food costs are going, as they'll continue to have a huge impact on future results. But also remember to take a longer-term view of strategic shifts to take advantage of more modern trends in the food industry.

Will SodaStream boost Campbell Soup?
SodaStream has been a huge growth play lately, so Campbell getting in on the action is a smart move that should help both companies. Find out more about SodaStream's carbonation technology in our premium report on the stock, which details the huge growth opportunity that SodaStream offers right now. The report comes with a year's worth of updates, so just click here to get started.

Click here to add Campbell Soup to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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