Campbell Soup Co. saw its second-quarter profit drop 15% today (23 February) as a stronger dollar and a reduction in retailer inventory levels hurt results.

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Net income for the period dropped to US$233m, or 64 cents a share, from $274m, or 71 cents a share in the year-ago period.


Adjusted earnings fell to 65 cents a share from 69 cents a share, while revenue dropped 4% to $2.12bn.


Campbell said the fiscal 2009 reported net earnings included charges associated with previously announced restructuring initiatives, the impact of unrealised losses on the company’s commodity hedging activities and a tax adjustment related to the divestiture of the Godiva business.


Douglas Conant, Campbell’s president and chief executive officer, said: “Overall, we are pleased with our performance in the quarter, especially considering that currency negatively impacted results and major retailers significantly reduced inventory levels. While these inventory reductions have impacted our US soup, sauces and beverages businesses, encouragingly consumer takeaway has outpaced sales growth.”

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Sales for the company’s US soup, sauces and beverages were $1.128bn, an increase of 3% compared to a year ago.


The US food maker said it expects 2009 earnings per share growth at the high end of the 5% to 7% range excluding currency effects over the adjusted 2008 base of $2.09 a share.


Conant concluded: “Campbell remains well positioned during this economic downturn due to the focused and value-oriented nature of our portfolio, the relative vitality of the categories in which we compete and our position within those categories. Despite broad economic challenges, we are optimistic about the second half of the year.”