Earnings Preview: Can Campbell Soup Turn Up the Heat?

Campbell Soup (NYSE: CPB) will be reporting its fiscal third-quarter 2011 results Monday, May 23, before the opening bell. Analysts are looking for the company to post earnings of $0.52 per share on revenue of $1.8 billion. That compares to $0.54 per share on $1.8 billion in the same period of last year. The consensus earnings estimate is unchanged from 30 days ago.

The world's largest soup maker also offers such processed and prepackaged foods as SpaghettiOs, Pace picante sauce, V8 beverages, Pepperidge Farm baked goods and Goldfish crackers. Its operating segments include U.S. Soup, Sauces and Beverages; International Soup, Sauces and Beverages; Baking and Snacking; and North America Foodservice. During the three months that ended in April, Campbell appointed a new vice president of corporate development and expanded its line of V8 juices.

Looking ahead to the full year, analysts so far expect to see results that are again essentially flat compared to a year ago: per-share earnings of $2.42 and revenues of $7.7 billion. Note that the company's earnings have fallen within a penny or two per share of consensus estimates in recent quarters.

Campbell does have a dividend yield of 3.2%, a return on equity of 76.7% and a price-to-earnings ratio that is much less than the food and beverage industry average. And the share price recently bottomed below $33 and bounced back to close yesterday at $35.34. That is above both the 50-day and 200-day moving averages. But the stock has underperformed competitors Heinz (NYSE: HNZ) and Kraft Foods (NYSE: KFT), as well as the broader markets, since the beginning of the year.

So unless Campbell provides an uncharacteristically large positive surprise or really optimistic guidance, it is hard to imagine this earnings report will to push the stock much higher.