Q1 Preview: Shunned Reduced-Salt Effort, European Demand Could Pressure Campbell's (CPB) Numbers

After trading lower for the majority of the session, shares of Campbell Soup Co. (NYSE: CPB) recently broke into positive territory Monday afternoon ahead of its first-quarter earnings report, expected out before the market opens Tuesday.

The Street is looking for earnings of 79 cents per share with revenue of $2.21 billion. Campbell reported earnings of 82 cents per share in the same period last year.

Shares of Campbell rose 1.5 percent through the quarter and have added another 1.5 percent since.

Data from Bloomberg has three analysts at Buy, 16 with a Hold, and two at Sell on Campbell. The Street price target average is $34, with a low of $31 and high of $36.

Analyst Comments

• Goldman Sachs is looking for earnings of 79 cents per share. Goldman is modeling for organic sales growth of 0.7 percent and a gross margin of 40.8 percent.
  
  Goldman's reasoning behind the outlook: "Continued volume declines in US Simple Meals driven by share loss in wet soup suggest little upside on the quarter. Recent Nielsen data suggests volumes in Soups, Sauces and Beverage are tracking in line with our -6% estimate, while pricing growth appears to be somewhat softer than our 3.5% expectation."
  
  
• Deutsche Bank is looking for earnings of 80 cents per share. Investors will focus on soup and sauce trends, as well as competitive dynamics. Deutsche comments, "We also look for an update on new products, pricing trends and the F2012 inflation outlook. Investors are likely to want a review of Australia given Arnott’s high margins."
  
  Concerns include recent efforts to reduce sodium and introduce sea salt, both of which altered the taste and may have turned away some loyal customers. Some compression from lacking demand in Europe might also be in store.
  
  One bright side Deutsche is looking for is Campbell's Arnott business in Australia. Despite competition and pricing wars, Arnott continues to have a solid position in the Australian market.

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Campbell's past performance at Streetinsider's Campbell's Income Statement.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Berenberg Starts Lloyds TSB Group (LYG) at Hold, 'shares are fairly valued'
• IBM tumbles on soft Q1 revenue; announces HashiCorp $6.4bn acquisition
• JPMorgan Downgrades Monster Beverage (MNST) to Neutral, 'Cost Pressures and Weaker Low-end Consumer'