Campbell's chief hints at gains from Hostess bankruptcy

When Hostess Brands Inc. closed its bakeries in November, Campbell Soup Co.'s Pepperidge Farm subsidiary stepped in.

"Due to the Hostess bankruptcy, we were able to get extra shelf space," Campbell's chief executive, Denise M. Morrison, said Friday during a conference call on the Camden company's earnings for the quarter that ended Jan. 27.

Campbell did not provide specifics on sales gains that could be attributed to that extra shelf space for its bakery products, but said that sales climbed 6 percent in its global baking and snacking segment.

Overall, Campbell's quarterly revenue, excluding $195 million in sales from the newly acquired Bolthouse Farms, was up less than 1 percent, to $2.13 billion from $2.11 billion in the comparable period a year ago.

Including Bolthouse Farms, which Campbell bought for $1.55 billion in August, sales were $2.33 billion, up 10 percent.

Campbell's net income fell 7 percent, to $190 million, or 60 cents per share, from $205 million, or 64 cents per share a year ago. Both years included restructuring costs. Excluding the restructuring charges in both years and Bolthouse Farms results, Campbell's operating income climbed 1 percent,

Longtime Campbell Soup analyst David Driscoll of Citi Investment Research commented during the conference call on the proposed sale, announced Thursday, of H.J. Heinz Co. for $28 billion to Berkshire Hathaway Inc.

"It's always been one of my beliefs, and I think a fairly widely held belief, that the combination of Campbell's and Heinz would produce just tremendously powerful cost synergies," Driscoll said.

"To see a company like Heinz go off the board from a financial buyer, who should have nowhere near the capabilities of bringing cost synergies like a Campbell's would, I'm just surprised that that type of a transaction has happened and we haven't seen Campbell involved," Driscoll said.

Morrison declined to comment specifically on Heinz. "We found the news surprising yesterday, as well, and we wish Heinz and all the investors well," she said.