Campbell Soup Earnings Preview: Double-Digit Revenue Growth Expected

, which some have speculated could be a takeover candidate for Warren Buffett and Berkshire Hathaway

, is scheduled to report its third-quarter fiscal 2013 results Monday, May 20, before the markets open. Investors will be watching for updates about several innovative new food and beverage products that were previously announced. The growth of healthy beverages and baked snacks business, as well as overseas expansion, are expected to bode well for the future of this nearly 145-year-old company.

Analysts on average predict that Campbell Soup will report revenue for the quarter that totaled $2.04 billion, which would be more than 11 percent higher than in the year-ago quarter. Earnings of $0.56 per share are also in the consensus forecast. That would be the same as the earnings per share (EPS) in the comparable period of last year. That consensus EPS estimate has remained steady over the past 60 days. However, analysts have underestimated Campbell Soup's EPS in the past six quarters. In the most recent report, EPS beat expectations by about six percent. The CEO said in the second-quarter report, "Despite weakness in our U.S. Beverages and North America Foodservice businesses, our first half business results were positive. ... Halfway through our fiscal year, we are making progress against our plans to return Campbell to sustainable, profitable net sales growth." The share price rose marginally in the week following the report. Looking ahead to the full year, the consensus forecast currently calls for a more than four percent year-over-year rise in per-share earnings. That EPS estimate is also unchanged from 60 days ago. And revenue for the fiscal year is expected to be almost 11 percent higher than in the year-ago period.

Campbell Soup manufactures and markets branded convenience food products worldwide. Among its many products are Campbell's soups, Pace and Prego sauces, Pepperidge Farm snacks and V8 juices. The company was founded in 1869 and its headquarters are now in Camden, New Jersey. Campbell Soup is a component of the S&P 500, and it has a market capitalization of about $15 billion and a dividend yield near 2.5 percent. Denise M. Morrison has served as chief executive officer and president since August 2011. Competitors include

, which is expected to report an earnings decline for the current quarter, and

, which recently posted lower first-quarter EPS but raised its full-year EPS guidance. The forecast for

calls for strong revenue growth in the current quarter. During the three months that ended in April, Campbell Soup saw it shares hit a series of 52-week highs throughout the quarter. The company announced expansion plans for Mexico, sought buyers for a plant in Sacramento and released a meal-planning mobile app.

Campbell Soup's price-to-earnings (P/E) ratio is a little lower than the industry average and the long-term EPS growth forecast is less than six percent. The company's operating margin is a bit better than the industry average, but note that the return on equity is more than 62 percent. The number of Campbell Soup shares sold short, as of the April 30 settlement date, was down more than three percent from the previous period and represented more than seven percent of the float. But days to cover rose to more than seven, the highest level since January. The consensus recommendation of the analysts surveyed by Thomson/First Call that follow the stock is to hold shares, and it has been for the past three months. The share price has overrun the analysts' mean price target, or where they expect the stock to go. Though the see no potential upside at this time, a positive earnings surprise or rosy guidance in the report might prompt hikes in analysts' target prices.

The share price is more than 32 percent higher year-to-date and reached another multiyear high last week. Shares are trading above the 50-day and 200-day moving averages. Over the past six months, the stock has outperformed the broader markets and the competitors mentioned above.