Campbell Soup Announced Positive Preliminary Fiscal 2Q16



Campbell Soup announced preliminary results for 2Q16

Campbell Soup (CPB) will be reporting its fiscal 2Q16 financial results on February 25, 2016, before the Market opens. On February 16, 2016, the company announced preliminary results for 2Q16. Based on better-than-expected outcomes, the company raised its earnings guidance for fiscal 2016. In this series, we’ll look at those preliminary results and the reasons behind the increased guidance.

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Stock rose 19% since last quarter’s results

CPB stock rose 2% and closed at $60.90 on February 17, 2016, after the preliminary 2Q16 results and raised guidance. Campbell Soup’s shares have risen 19% since the last quarter earnings announcement. The company reported its fiscal 1Q16 results on November 24, 2015, and the stock rose 3%. The shares have been on a rising trend since then due to positive earnings growth.

CPB shares have risen 18% so far in 2016 as of February 18, 2016. In the last two months, they have risen 7%. The stock rose as much as 9% in calendar year 2015. It profited because of the company’s capital control mechanism.

The company reduced inflation-related charges by lowering its input costs and capital expenses. Campbell Soup also continued to raise its earnings outlook for fiscal 2016, even with a year-over-year 2% fall in revenue. The stock’s price movements on YTD (year-to-date) and month-to-date bases are 16.0% and 8.0%, respectively. CPB is trading at 5.3% on a trailing-five-day basis. The stock closed at $60.96 on February 18, 2016.

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Brands and peers

Campbell is based in Camden, New Jersey. With its three new divisions and its subsidiaries, Campbell manufactures and markets convenience food products. It’s part of the processed and packaged goods industry. Peers in the industry include Hormel Foods (HRL), General Mills (GIS), and ConAgra Foods (CAG).

Hormel, General Mills, and ConAgra closed at $42.80, $58.60, and $41.76, respectively, on February 18, 2016. The Guggenheim S&P 500 Equal Weight Consumer Staples ETF (RHS) invests 2.7% of its portfolio in CPB stock. It also invests 2.5% and 2.7% in GIS and CAG, respectively. It closed at $116.70 on February 18, 2016. As of the same date, the year-to-date return for RHS was 0.62%, while CPB’s was 16.0%.

What to look for in this series

In this series, we’ll do a quick recap of Campbell Soup’s fiscal 1Q16 performance, the company’s revenue trend, estimates, and what hurt the revenues in the previous quarter. We’ll also glance through how the stock and its peers are trading compared to their moving averages. Finally, we’ll see what the Wall Street recommendations are for the stock before the earnings release and what the company’s raised guidance is for fiscal 2016.


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