ConAgra's Q4 profit rises, but falls below Street estimates
ConAgra Foods (NYSE:CAG) announced Thursday a bearish outlook after it more than doubled its fourth quarter profits as higher input costs continue to impact.
For the three months ending May 29, ConAgra posted net income of $255.6 million, or $0.61 per share, representing an over 180% increase compared to the previous year period's $90.2 million, or $0.20 per share, profit.
Adjusted for one-time benefits and expenses impacting comparability, earnings per share were $0.47 in the latest quarter, 24% above the $0.38 per share earned a year ago. Analysts expected earnings of 48 cents per share.
The Omaha, Nebraska-based food company said that for the first quarter of fiscal 2012, it expects adjusted earnings to be below the comparable 34 cents per share earned a year earlier.
"High input costs and difficult economic conditions are expected to continue to create challenges in fiscal 2012; additional pricing actions are under way, and productivity initiatives should continue to be strong," said CEO Gary Rodkin.
Still, the company said it expects stronger growth in the second half of the year, and expects that for the full year fiscal 2012, adjusted earnings will grow in the low to mid single digits over the comparable base of $1.75 earned the previous year, slightly above the low single digit growth forecasted in March.
ConAgra posted net sales of $3.21 billion during the fourth quarter, a 5.3% year-over-year rise. Consumer foods contributed 63% of total sales, while commercial foods accounted for the remaining 37%.
Higher production costs forced the company to inflate its prices in its consumer foods segment by 9%, it said. The segment, which is made up of brands like Chef Boyardee, Orville Redenbacher's, PAM and Healthy Choice, posted sales of $2.03 billion, less than one percent up from the year-ago period, as volumes declined.
ConAgra attributed lower volumes to difficult market conditions, including soft demand and the impact of price increases necessitated by high input costs.
Meanwhile, the commercial foods segment, comprised of brands like Lamb Weston and Sustagrain, posted sales of $1.18 billion, a 14.6% year-over-year spike. Higher flour milling prices, caused by higher wheat costs, and increased volumes for Lamb Weston products drove the increase, the company said.
"Net pricing has begun to improve in consumer foods sales, cost savings are on track, and Lamb Weston and flour milling operations are delivering stronger results for our commercial foods segment," added Rodkin.
By quarter-end, ConAgra, whose stock on the New York Stock Exchange slipped 0.79% to trade at $25.22 per share as of Thursday at 10:23 am EDT, also announced that it had completed its $58 million purchase of the Marie Callender's brand trademarks.
Related news
- London Mining remains on track to hit 2012 production target at Marampa
- Ceres Power Holdings reports significant improvements of its fuel cell products
- Oxford Catalysts Group shares advance as it announces first start-up of FT reactor
- Mariana Resources kicks off drilling programme at Las Calandrias gold-silver project
- Orogen Gold begins Phase 1 drilling programme at Deli Jovan
- Magnolia Petroleum on track to hit 100 wells target by end-2012
- Mwana Africa sells 15pct stake in Freda Rebecca gold mine for $405k - UPDATE
