Late last year, the Campbell Soup Company (NYSE: CPB) sold off Godiva Chocolatier for a cool $850 million. So why give up such a prized brand?

Well, it will mean that Campbell can focus on its core business of soups and snacks. Next, the chocolate market is highly competitive -- especially in light of the recent deal between Mars and Wm. Wrigley Jr. Company (NYSE: WWY).

The deal was also a big help for the Q1 results. Net income went from $217 million, or $0.55 per share, to $532 million, or $1.40 per share. Revenue increased 7.4% to $1.88 billion. Unfortunately, soup revenues were meager, falling 3%. Simply put, Campbell's competitors are getting the upper hand. It also doesn't help that there is commodities inflation.

On the conference call, Campbell was upbeat. After all, the company is launching a variety of health-conscious offerings. But so far, investors aren't convinced. In today's trading, Campbell's shares fell 6% to $33.70. It was the lowest level in eight years.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Campbell snacks on M&A originally appeared on BloggingStocks on Mon, 19 May 2008 17:43:00 EST. Please see our terms for use of feeds.