Campbell Soup Company describes itself as "a manufacturer and marketer of high-quality, branded food and beverage products" [Source: 2019 Form 10-K]. The following are selected highlights from the Wednesday Dec 9, 2020 press release about first quarter of Fiscal Year 2021 by Campbell Soup Company. CAMDEN, N.J., Dec. 9, 2020Campbell Soup Company (NYSE:CPB) today reported results for its first-quarter fiscal 2021 and announced a 6% increase to its quarterly dividend. Three Months Ended Nov. 1, 2020 Oct 27, 2019 % Change $2,340 $2,183 7% 896 Continuing Operations (5 in millions, except per share) Net Sales As Reported (GAAP) Organic Earnings Before Interest and Taxes (EBIT) As Reported (GAAP) Adjusted Diluted Earnings Per Share As Reported (GAAP) Adjusted 45% $461 $463 $317 $392 18% $1.02 $1.02 $0.56 82% 31% $0.78 Daily closing stock price information in the days surrounding the fourth quarter 2020 earnings announcement: Campbell Soup, Stock Price by Day: Date Close Volume 11-Dec-20 46.85 2,138,800 10-Dec-20 46.94 2,810,300 9-Dec-20 46.91 5,747,100 2,952,200 8-Dec-20 47.89 Questions: a. Review the highlighted information in Campbell Soup's Frist Quarter 2021 press release. Would you characterize the information as favorable or unfavorable? What is your benchmark? What would be another benchmark that you might consider relevant? b. Compute the stock market reaction to the press release information by computing the percentage change in closing stock price over the 2 day period beginning with the end of the trading day before the earnings announcement (t-1) to the end of the day following the earnings announcement (t+1) where t = the day of the earnings announcement. C. AJP Morgan Financial Analyst forecast that for Q1 of 2021, Campbell Soup Fully Diluted EPS would be $0.91 per share. Does this change your view on the positive or negative news in the Q2 2020 press release? Discuss why or why not? Be sure to note the information you use to make your assessment. d. Are you surprised by the size and direction of the market reaction based on the information in the earnings release and knowledge about the consensus analyst forecast? What other factors do you think stock market investors might be considering in reacting to the fourth quarter press release? e. Look at the daily trading volume, why do we see such an increase in volume we compare the 9th of Dec compared to the 8th or the 10th? Please provide all responses in the text box below and please copy and paste the appropriate part of the question and label your answers carefully, so I know which of the five questions above you are answering. Campbell Soup Company describes itself as "a manufacturer and marketer of high-quality, branded food and beverage products" [Source: 2019 Form 10-K]. The following are selected highlights from the Wednesday Dec 9, 2020 press release about first quarter of Fiscal Year 2021 by Campbell Soup Company. CAMDEN, N.J., Dec. 9, 2020Campbell Soup Company (NYSE:CPB) today reported results for its first-quarter fiscal 2021 and announced a 6% increase to its quarterly dividend. Three Months Ended Nov. 1, 2020 Oct 27, 2019 % Change $2,340 $2,183 7% 896 Continuing Operations (5 in millions, except per share) Net Sales As Reported (GAAP) Organic Earnings Before Interest and Taxes (EBIT) As Reported (GAAP) Adjusted Diluted Earnings Per Share As Reported (GAAP) Adjusted 45% $461 $463 $317 $392 18% $1.02 $1.02 $0.56 82% 31% $0.78 Daily closing stock price information in the days surrounding the fourth quarter 2020 earnings announcement: Campbell Soup, Stock Price by Day: Date Close Volume 11-Dec-20 46.85 2,138,800 10-Dec-20 46.94 2,810,300 9-Dec-20 46.91 5,747,100 2,952,200 8-Dec-20 47.89 Questions: a. Review the highlighted information in Campbell Soup's Frist Quarter 2021 press release. Would you characterize the information as favorable or unfavorable? What is your benchmark? What would be another benchmark that you might consider relevant? b. Compute the stock market reaction to the press release information by computing the percentage change in closing stock price over the 2 day period beginning with the end of the trading day before the earnings announcement (t-1) to the end of the day following the earnings announcement (t+1) where t = the day of the earnings announcement. C. AJP Morgan Financial Analyst forecast that for Q1 of 2021, Campbell Soup Fully Diluted EPS would be $0.91 per share. Does this change your view on the positive or negative news in the Q2 2020 press release? Discuss why or why not? Be sure to note the information you use to make your assessment. d. Are you surprised by the size and direction of the market reaction based on the information in the earnings release and knowledge about the consensus analyst forecast? What other factors do you think stock market investors might be considering in reacting to the fourth quarter press release? e. Look at the daily trading volume, why do we see such an increase in volume we compare the 9th of Dec compared to the 8th or the 10th? Please provide all responses in the text box below and please copy and paste the appropriate part of the question and label your answers carefully, so I know which of the five questions above you are answering
