Campbell Soup Company (NYSE:CPB) reported its financial results for the fourth quarter and for fiscal 2016. The results missed analysts’ expectations due to the poor performance of Campbell Fresh business.
For the fourth quarter, sales decreased 0.35% to $1.687 billion, which met analyst’ expectations. Organic sales fell 1% in the fourth quarter, mainly because of the loss in Campbell Fresh business, which suffers from the decrease in carrot and carrot ingredients. The voluntary recall of protein drinks in June also had negative effect on Campbell Fresh business. Thanks to the acquisition of Garden Fresh Gourmet, the sales of Campbell in the fourth quarter were comparable to the same period last year.
The company reported net loss of $81 million, or $0.26 per share in the fourth quarter, while Campbell declared a profit of $17 million, or $0.50 per share in the same period of last year. The loss of the company in the last quarter was mainly due to the Bolthouse Farms’ pre-tax impairment charge of $141 million. Earnings from continuing operations, excluding items, decreased from $0.49 per share to $0.46 per share, which missed analysts’ estimates of $0.50 per share.
For the fiscal 2016, sales of the company fell 1% to $7.961 billion. EBIT fell 9% to $960 million, and adjusted EBIT rose 11% to $1.467 billion. In addition, the cash flow from operation for fiscal 2016 increased from $1.182 billion to $1.463 billion.
Based on the financial results for the fourth quarter and fiscal 2016, the company expected sales to rise by 0% to 1% in 2017, and adjusted EPS to increase by 2% to 5%, or $3.00 to $3.90 per share, which was below the analysts’ estimate of $3.14 per share.
“We finished the year in line with our guidance, including strong profit performance. However, I am not pleased with the results of our fourth quarter,” said Denise Morrison, the CEO of Campbell. “The performance of our Campbell Fresh business, driven predominantly by execution issues, is disappointing.”
Morrison also said in the release that the company need to deliver sales growth and the Board declared a 12% rise in the quarterly dividend.
Share of Campbell decreased over 4% in premarket trading today, and fell 5.96% to $57.11 per share in midday trading.