Campbell Soup Company (CPB)

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Campbell Soup Company (CPB)

F3Q10 Earnings Call

May 24, 2010 10:00 am ET

Executives

Jennifer Driscoll - VP, IR

Doug Conant - President and CEO

Craig Owens - SVP, CFO and Chief Administrative Officer

Anthony DiSilvestro - VP and Controller

Analysts

Alexia Howard – Sanford Bernstein

Eric Katzman – Deutsche Bank

Andrew Lazar – Barclays

Chris Growe – Stifel Nicolaus

Bryan Spillane – Bank of America

David Palmer – UBS

Terry Bivens – J.P. Morgan

Vincent Andrews – Morgan Stanley

Ed Aaron – RBC Capital Markets

Robert Moskow – Credit Suisse

Analyst for David Driscoll – Citi Investment

Judy Hong – Goldman Sachs

John Feeney – Janney Montgomery Scott

Rob Dickerson – Consumer Edge

Presentation

Operator

Welcome to Campbell Soup third quarter 2010 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Jennifer Driscoll, Vice President, Investor Relations. Please go ahead.

Jennifer Driscoll

Thank you, operator. Good morning, everyone and welcome to the Campbell’s third quarter earnings webcast. With me here today are Doug Conant, President and CEO; Craig Owens, CFO and Chief Administrative Officer; and Anthony DiSilvestro, Vice President of Finance. First Doug and Craig will provide perspective on our performance for the quarter and the first nine months as well as our updated outlook for the full fiscal year. Following their remarks, we'll take questions from analysts and investors.

As usual, we have created slides to accompany our presentation. You will find the posted on our website this morning. Speaking of our website we would like to invite you to visit our newly revamped site for investors found at investor.campbellsoupcompany.com where we offer you streamlined navigation and improved functionality. We welcome your feedback on this site as we are always interested in improving it as a resource for you.

We also have scheduled an analyst day from 1-5 p.m. on Monday, July 12, at our world headquarters in Camden, New Jersey. We will meet inside our new employee center which will be completed in June. We will email invitations to our investor list and also encourage participation via webcast. Please keep in mind as usual this call is open to the media who are listening in listen-only mode.

As a reminder, our presentation today includes certain forward-looking statements that reflect the company's current expectations about future plans and performance. These forward-looking statements rely on a number of assumptions and estimates that could be inaccurate and which inherently are subject to risks and uncertainties. Please refer to slide three in the presentation or to the company's most recent Form 10-K and subsequent SEC filings for a list of the factors that could cause our actual results to vary materially from those anticipated or expressed in any forward-looking statement.

Before I turn it over to Doug I would like to point out two items in our third quarter which impact the comparability of our results. The first is a restructuring charge equal to $0.02 per share as we have now completed the restructuring program we announced in April 2008. The second is a non-cash deferred tax expense of $0.03 per share to reflect the impact of the recently enacted healthcare legislation on Medicare Part D reimbursements. The prior-year quarter and year-to-date results also included items that impacted comparability such as restructuring related costs, adjustments on open commodity hedge positions and a tax gain recorded in discontinued operations.

Throughout this presentation we will discuss the results on an adjusted basis excluding the items that impacted comparability. Since our presentation includes these non-GAAP measures as defined by SEC rules, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, as an appendix to the slides accompanying our presentation. These slides, including the appendix can be found on our events website this morning.

With that, I give you our President and CEO, Doug Conant.

Doug Conant

Good morning and thank you Jennifer. Thanks for starting us off and thanks to all of you on the phone or webcast for joining Campbell’s third quarter earnings conference call.

I would like to share a few broad observations about our performance in the third quarter and year-to-date. I am also going to introduce some new information about market share as we have promised to do. Then I will turn it over to Craig for a more detailed discussion of results.

This morning we reported adjusted net earnings per share increased 13% for the third quarter. It was a strong performance overall including benefits from volume growth, continued productivity gains and favorable currency. Our business and healthy beverages led the company in sales and profit growth. Our Beverages results benefited from compelling advertising, effective promotions and continued innovation especially with V8 V-Fusion. We also saw strength in V8 vegetable juice as consumers responded to our marketing efforts.

In addition, as anticipated U.S. soup volume performance significantly improved. We continued our advertising support and stepped up our trade activity in soup. Our agility in executing course corrections and a strong consumer response drove a rebound in ready-to-serve soup while condensed soup and broth volume continued to perform well. Our sauces business also performed well including gains from popular meal makers like Prego and Pace sauces which benefited from the continuing consumer trend of dining at home. This combination resulted in a healthy increase in our total U.S. soup, sauces and beverages segment which clearly drove the company’s results.

Read the rest of this transcript for free on seekingalpha.com