UPDATE: ConAgra 4Q Sales Down 5%; Foodservice Business Pressured
June 24 2010 - 9:25AM
Dow Jones News
ConAgra Foods Inc.'s (CAG) fiscal fourth-quarter sales declined
5% as the company's foodservice business stayed under pressure and
as sales of brands like Egg Beaters and Act II popcorn slipped.
The company reported a 48% drop in profit as it absorbed charges
for manufacturing changes and other items, and results came in
below Wall Street's expectations. The company's year-ago quarter
also had an extra week of operations. The stock was recently down
1.4% to $24.34 premarket.
The maker of Chef Boyardee pasta, Hunt's ketchup and Peter Pan
peanut butter forecast per-share earnings growth for the new year
of 8% to 10%, mostly concentrated in the second half of the fiscal
year. Analysts surveyed by Thomson Reuters expected 10% growth to
$1.91 a share.
Volumes at the company's key consumer foods segment declined,
although the company said that they rose when adjusted for an extra
week in the year ago period. Companies like ConAgra benefited in
the downturn from cash strapped consumers eating more meals at
home, but these companies' foodservice businesses - which supply
restaurants - have been pinched.
For the quarter ended May 30, ConAgra reported a profit of $90.6
million, or 20 cents a share, down from $174.7 million, or 39
cents, a year earlier. Excluding hedging and other items, earnings
from continuing operations fell to 39 cents from 41 cents as
revenue dropped 5% to $3.06 billion.
Analysts had most recently forecast earnings of 40 cents on
$3.18 billion in revenue.
Sales at the consumer-foods unit, ConAgra's biggest, fell 4.3%,
but the company said they rose 3% when adjusted for the extra week
a year earlier. Profit slid 15% and volume dropped 4%. Meanwhile,
revenue at the commercial-foods segment declined 6.3% while profit
slumped 26%. The commercial foods segment caters to the foodservice
industry and has been under pressure as restaurants have done
poorly.
-By Nathan Becker and Anjali Cordeiro, Dow Jones Newswires;
212-416-2855; nathan.becker@dowjones.com
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Jun 2024 to Jul 2024
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Jul 2023 to Jul 2024