The soup maker Campbell Soup Co.’s shares fell down after the company shared their fairly disappointing earnings. The packaged food company also delivered a forecast that was weaker than what most analysts expected. This clearly provided more evidence that the slump that is being felt all across the industry is here to stay.
This outlook followed another disappointment for the company’s shareholders on Wednesday when Warren Buffett completely discarded the idea of Kraft Heinz Co. buying Mondelez International Inc. These remarks were interpreted by the investors as a signal for the consolidation of the industry. This means that it is less likely that a Campbell takeover would provide them the money that they are expecting.
As the merger chances drop, the results of the company are now under even more scrutiny. The adjusted earnings in the last quarter were 52 cents. This was below the analyst projection of 55 cents. The sales of the company also dropped to about $1.66 Billion as compared to the $1.69 Billion estimate.
Due to this report, Campbell’s share price went down by about 6.6 per cent. The final amount was $46.99 per share. This was the biggest decline since February. These shares have already dropped by about 17% this year till the market close on Wednesday. This is their lowest level in two whole years.
Campbell had acquired Bolthouse in 2012 for $1.55 Billion and also agreed to buy Pacific Foods of Oregon for $700 Million this June. But Bolthouse has also struggled with poor harvests. It is now a part of the fresh unit of Campbell.
The CEO of the company said last September that they had restructured the Bolthouse unit by removing several senior managers so that they can turn the business around. She said that their issues were unacceptable for the company.