The tepid outlook follows another disappointment for shareholders on Wednesday, when Warren Buffett threw cold water on the idea that Kraft Heinz Co. would buy a company like Mondelez International Inc. Investors interpreted the remarks as a bearish signal for industry consolidation in general, meaning it’s less likely that a takeover of Campbell will provide a payday for them.
As the chances of a merger drop, Campbell’s results are under more scrutiny — and they weren’t strong last quarter. Adjusted earnings amounted to 52 cents, missing the 55-cent projection of analysts. Sales dropped to $1.66 billion, compared with an estimate of $1.69 billion.
“The bulk of their business doesn’t show any signs of turning around, and they haven’t had any blockbuster new products,” said Michael Halen, an analyst at Bloomberg Intelligence. “It’s brutal.”
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Over the past three years, the 10 largest packaged-food companies have seen about $16 billion in revenue evaporate as consumers change how they eat and shop. Shoppers are seeking out more natural and organic food, shifting away from the staples that have dominated supermarket shelves for decades.