Campbell Soup has reported a smaller-than-expected quarterly adjusted profit due to a product recall as well as higher costs and lower sales of carrots. The company expects these issues will dent sales for the rest of the year.

The world’s largest soupmaker also gave a full-year adjusted earnings forecast that fell short of analysts’ estimates, sending its shares tumbling 6.5 per cent to a more than six-month low on Thursday.

The net loss attributable to Campbell Soup was $81 million in the quarter due to a $141 million pre-tax impairment charge related to Bolthouse. The company earned $17 million a year earlier.

Excluding items, Campbell Soup earned 46 cents per share, below analysts’ average estimate of 50 cents, according to Thomson Reuters I/B/E/S (Institutional Brokers’ Estimate System).

Net sales dipped 0.35 per cent to $1.69 billion, but was in line with analysts’ estimates.

The company’s problems in the quarter were centred around its Campbell Fresh business, which it has been boosting through acquisitions to cater to consumers’ increasing preference for fresh and organic foods over processed foods.

Campbell Fresh operating profit plunged 62 per cent in the quarter and sales fell 5 per cent, hurt by a recall of protein drinks in June, higher carrot costs and lower sales of carrots and carrot ingredients – all in the Bolthouse Farms unit.

Campbell Soup said it harvested carrots – the best known products of Bolthouse – prematurely in spring. That resulted in smaller carrots, which led to dissatisfied customers and loss of business.

– Reuters