Campbell Soup (CPB) reported earnings on Fri 16 Feb 2018 (b/o)

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 ** charts after earnings **

Campbell Soup beats by $0.19, reports revs in-line; raises FY18 EPS above consensus due to tax reform; increases cost savings target 

• Reports Q2 (Jan) earnings of $1.00 per share, excluding non-recurring items, $0.19 better thanthe Capital IQ Consensus of $0.81; revenues rose 0.4% year/year to $2.18 bln vs the $2.16 bln Capital IQ Consensus; a 1-point benefit from the acquisition of Pacific Foods and a 1-point favorable impact of currency translation were offset by a 2% decline in organic sales driven primarily by lower volumes. Adjusted gross margin decreased 2.2 percentage points to 35.2 percent. The decrease in adjusted gross margin was driven primarily by cost inflation and higher supply chain costs, as well as unfavorable mix, partly offset by productivity improvements and the benefits from cost savings initiatives.
• "This was a disappointing quarter, driven by continued challenges in U.S. soup and Campbell Fresh. The decline in organic sales was largely due to the performance of Americas Simple Meals and Beverages, where U.S. soup sales decreased by 7 percent based on the key customer issue we discussed last quarter. We are making progress with this customer and expect sales declines in soup to moderate in the second half."
• Co issues guidance for FY18, raises EPS to $3.10-3.17 from $2.95-3.02, excluding non-recurring items, vs. $2.98 Capital IQ Consensus Estimate; sees FY18 revs -1 to +1% to ~$7.81-7.97 bln from +0-2% vs. $7.87 bln Capital IQ Consensus Estimate.
• Based on the success of the program to date and the identification of additional savings opportunities, Campbell has increased the annualized savings target from $450 million to $500 million by the end of fiscal 2020.