Is it me, or were this morning's results out of Campbell Soup (NYSE:CPB) about as opaque as its creamy mushroom soup? Let's try for some clarity.

For the third quarter, earnings came in at $0.34 a share, up from $0.31 a year ago. Umm, that's good. Then there is a $0.02 gain from a class action settlement. Umm, that's OK. Finally, there is guidance for next quarter of $0.17 a share, down from $0.18 a year ago (though this year's quarter is a week shorter). Umm, good? Not really. That still adds up to growth of just 4% on the year.

CEO Douglas Conant identified the problem: "... we must address the decline in our operating margins." That's right. Operating margins declined from 17.6% to 15.2%.

Problems are clearly evident at North America Soup and Away From Home -- the largest of the company's four segments. Sales declined 4% from last year, and the earnings contribution fell a startling 23%. It gets worse when you consider that promotional spending was actually up.

If you're thinking, "But the company is diversified," consider this: North America Soup accounts for 35% of sales but a full 45% of operating income. Biscuits & Confection and International account for 47% of sales combined but a meager 9.5% of operating earnings. Diversification is there -- but the margins beyond soup are far from yummy.

To be fair, while those 15.2% operating margins are declining at Campbell's, they marginally exceed those at H.J. Heinz (NYSE:HNZ). It's also fair to point out, however, that the 18% margins enjoyed by General Mills (NYSE:GIS) and Kraft (NYSE:KFT) make clear that CEO Conant is right on when he says there are improvements to be made.

Meanwhile, the stock has been something of a laggard, yet trades at 16.5 times 2004 earnings. And while it does yield 2.5% -- in other words, creeping into Motley Fool Income Investor territory -- analysts expect earnings growth of just 6% for fiscal year 2005. Put it all together and Campbell's is lukewarm, at best.

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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.