Campbell Soup cpb reported a 7.2% decline in first-quarter profit on Monday as the world's largest soupmaker absorbed higher costs for ingredients and spent more on advertising.
Its shares slipped 41 cents, or 1.2%, to $34.85 in morning trading Monday.
The company said it earned $270 million, or 70 cents a share, the three months ended Oct. 28, down from $291 million, or 72 cents a share, a year ago.
Analysts polled by Thomson Financial said they expected earnings of 71 cents a share. Those estimates typically exclude one-time items.
Third-quarter sales were $2.3 billion, up 6.7% from $2.15 billion a year ago.
Excluding year-ago results from operations that have since been sold or discontinued, the latest profit was up $1 million from $269 million a year earlier.
The company said its margins fell because it did not raise prices to keep up with rising ingredient costs.
Campbell also said it spent more on advertising in the quarter.
Campbell's President and CEO Douglas Conant said the company still expects sales growth between 3% and 4% for fiscal year 2008 and earnings per share from continuing operations to be up 5% to 7% for the year.
The 53rd week in the fiscal year will help, he said.
The heart of soup-eating season traditionally falls in the second and third quarters.
In addition to being the largest soupmaker, the food conglomerate based in Camden, N.J., sells products including Pepperidge Farm cookies and crackers, V8 juices and Prego pasta sauce.
The company has been considering selling its Godiva Chocolatier business.