Campbell's Q3 Net Earnings Decline

NEW YORK - May 24/10 - SNS -- Campbell Soup Company (reported net earnings of U.. $168 million on sales of 1,802 million during the third quarter ending May 2, compared to a net of $174 million on sales of $1,686 million during the same three month period last year.

Thislifted net earning for the first nine months of the current fiscal year to $731 million on saldes of $6,158 million, compared to net earnings of $667 million on sales of $6,058 million uring the same three quarters of the previous fiscal year.

Sales for U.S. Soup, Sauces and Beverages were $848 million for the third quarter, an increase of 5% compared with a year ago. Sales of "Campbell's" condensed cooking and eating soups decreased 1%, as increased promotional spending more than offset volume gains.

Sales of ready-to-serve soups increased 4%, an improvement from the first half of the fiscal year. Strong volume gains in "Chunky" and "Select Harvest" canned soups more than offset increased promotional spending and declines in microwavable varieties.

Broth salesincreased 9%.

Beverage sales increased 13% driven by volume gains. 'V8 V-Fusion' juice sales increased significantly due to increased advertising and promotional activity and successful new item launches. Sales of "V8" vegetable juice and "V8 Splash" juice drinks rose as both benefitted from increased promotional activity.

Sauces sales improved reflecting good gains in "Prego" pasta sauce and double-digit growth in "Pace" Mexican sauce.

Sales for Baking and Snacking were $477 million in the third quarter, an increase of 11% from a year ago. Sales of Pepperidge Farm increased primarily due to the acquisition of Ecce Panis, Inc. and gains in the cookies and crackers business.

In the cookies and crackers business, sales increased, reflecting the continued solid growth of "Goldfish" snack crackers, partly offset by a decline in cookies.

In Australia, sales increased due to currency and continued growth in Arnott's, led by chocolate snacks, partially offset by declines in both savory and sweet biscuit products.

Sales for International Soup, Sauces and Beverages were $331 million for the third quarter, an increase of 11% compared with a year ago.

In Europe, sales increased primarily due to currency and higher sales in Germany, partly offset by lower sales in France. In Asia Pacific, sales increased primarily due to currency. In Canada, sales increased due to currency, partially offset by lower soup sales.

In the company's North America Foodservice division, sales were $146 million for the third quarter, a decrease of 3% compared with a year ago. There was an operating loss of $3 million compared with a $13 million gain in the prior-year quarter. The current quarter included a $12 million restructuring charge, while the prior-year quarter included $5 million in restructuring-related costs. The remaining decrease was primarily due to lower sales.

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