NEW YORK (Reuters) - Campbell Soup Co <CPB.N> reported higher-than-expected quarterly results on Friday as it spent less to promote its long-struggling U.S. soup business.
To turn around the unit's performance, Chief Executive Officer Denise Morrison put more money into advertising instead of promotional discounts. The strategy boosted earnings, but led to a 9 percent decline in U.S. soup sales as some customers apparently switched to cheaper brands.
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Fiscal 2012, which began on August 1, will be "a year of transition," said Morrison, who has been in the top job for just over one month.
The world's top soup maker said fiscal-year sales would be unchanged to up 2 percent, with earnings before special items declining 5 percent to 7 percent from 2011's $2.54 per share.
Campbell shares rose 0.7 percent to $32.08 in early trading.
Morrison, who succeeded longtime CEO Douglas Conant, has already set plans for Campbell to exit its business in Russia, cut hundreds of jobs and put sodium back in 31 Select Harvest varieties of soup based on consumer feedback.
The company has "more work to do," Morrison said in a statement.
Reducing promotional spending helped improve soup profits, but volume declined. At the same time, higher costs and promotional spending put pressure on the company's beverage earnings.
Campbell said net income fell to $100 million, or 31 cents per share, in its fourth quarter from $113 million, or 33 cents per share, a year earlier.
Excluding restructuring charges, earnings increased 30 percent to 43 cents a share. Analysts on average expected 38 cents, according to Thomson Reuters I/B/E/S.
Sales rose 6 percent to nearly $1.61 billion, beating analysts' expectations of $1.57 billion.
(Reporting by Martinne Geller in New York, additional reporting by Jessica Wohl in Chicago; Editing by Lisa Von Ahn and Steve Orlofsky)