ConAgra Foods Earnings: Here’s Why Shares are Up Now

ConAgra Foods, Inc. (NYSE:CAG) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 3%.

ConAgra Foods, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 17.65% to $0.6 in the quarter versus EPS of $0.51 in the year-earlier quarter.

Revenue: Rose 34.56% to $4.59 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: ConAgra Foods, Inc. reported adjusted EPS income of $0.6 per share. By that measure, the company beat the mean analyst estimate of $0.59. It missed the average revenue estimate of $4.6 billion.

Quoting Management: Gary Rodkin, ConAgra Foods’ chief executive officer, said, “We are pleased to have driven a 17% increase in comparable EPS for fiscal 2013, and to have posted comparable year-over-year Consumer Foods volume growth in the fiscal fourth quarter as planned. Today we provided our current view of our strong near-term and long-term EPS growth potential, taking into account an increase in expected synergies from the recent Ralcorp transaction, as well as the benefit of our ongoing innovation, marketing, and margin management initiatives. We are confident in our strategy and our ability to execute it. After the strong fiscal 2013 performance from the Commercial Foods segment, we will be dealing with some profit headwinds related to that segment in fiscal 2014, and we expect to manage through these and still post very good EPS growth for the fiscal year. As we look to the longer term, given the opportunities ahead of us, we expect to grow comparable EPS by at least 10% per year from fiscal 2015-2017; this is expected to result in five consecutive years of double-digit EPS growth, and EPS in excess of $3.00 per share in fiscal 2017.”

Key Stats (on next page)…

Revenue increased 19.3% from $3.85 billion in the previous quarter. EPS increased 9.09% from $0.55 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.53 to a profit $0.52. For the current year, the average estimate is a profit of $2.15, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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