Campbell's Soup Company (NYSE:CPB), the world's largest maker of soups, sold plenty during the fiscal fourth quarter. During the quarter, the company reported adjusted net income that was up 10% quarter-over-quarter. For the year, adjusted net income was up 12%. Sales, the number that everyone looks at today, were down 1% quarter-over-quarter and year-over-year, respectively.

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Sales, Sales, Sales
Like many businesses today, Campbell's shows how it is able to do more with less. Earnings growth is nice to see, but in an economy seemingly on the verge of falling back into a recession, sales is the number people are watching. Sales growth gives businesses confidence to invest in growth, which in turn creates employment opportunities. Looking deeper into Campbell's figures reveal a weak U.S. soup business that was down 4% for the year, another reflection of weakened economy in the U.S. By comparison, rival food company HJ Heinz (NYSE:HNZ) reported a 13% increase in profit on a near 2% increase in sales due to strong growth markets like India, China and Russia. Specifically in Asia, sales were up almost 20% for Heinz, an illustration of how important emerging market growth has become to these U.S.-based global giants. With the overseas growth, Heinz experienced continued weakness in the U.S. markets. Same goes for Kraft (NYSE:KFT), which is benefiting from the emerging market exposure brought on via its Cadbury acquisition. (For more, see Re-evaluating Emerging Markets.)

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Disappointing News
Despite beating analysts' earnings (estimates), the focus was clearly on the sales number and the outlook for 2011. The forecast wasn't convincing, and Campbell's shares were down nearly 3% on the news. Unlike other food giants, Campbell's shares had been trading at a 52-week high of nearly $38, before the earnings news. Despite trading at a still-digestible 16-times earnings and yielding 3%, some of its peers appear to hold better relative valuations with the added opportunity of growth overseas. Kraft trades for 11-times earnings and yields almost 4%. Nestle (NSRGY), the largest food company in the world and a greater presence in emerging than many U.S. rivals, fetches just under 15-times earnings and is showing healthy signs of growth. In its most recent quarter, Nestle's growth has been fueled by increases in both volume and pricing, respectively. Overall, growth was 5.7% due to a 4.2% increase in volume and a 1.5% lift in pricing.


The Bottom Line
Campbells' size and dominance in its core markets have stood up very well in this economy. Despite an overall quality quarter, considering the state of the economy, investors now seemed focused on the growth in sales going forward. Profits can only grow so much without a increase in the top line. (For related reading, check out Del Monte Foods Gets Canned.)