ConAgra Foods Earnings: Tops Estimates, Shares Tick Upward

S&P 500 (NYSE:SPY) component ConAgra Foods Inc. (NYSE:CAG) reported its results for the fourth quarter. ConAgra Foods supplies frozen potato products, as well as other food products, to restaurants and commercial customers.

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ConAgra Foods Inc. Earnings Cheat Sheet

Results: Reported a loss of $83.5 million (21 cents per diluted share) in the quarter. ConAgra Foods Inc. had a net income of $254.9 million or 61 cents per share in the year-earlier quarter.

Revenue: Rose 6.3% to $3.41 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: ConAgra Foods Inc. reported adjusted net income of 51 cents per share. By that measure, the company beat the mean estimate of 50 cents per share. Analysts were expecting revenue of $3.38 billion.

Quoting Management: Gary Rodkin, ConAgra Foods’ chief executive officer, commented, “Although the business environment remains challenging, we posted comparable year-over-year EPS growth for the fiscal fourth quarter, as planned. The Consumer Foods segment posted comparable year-over-year profit growth for the fiscal fourth quarter due to contribution from acquired businesses, moderating inflation, and progress with pricing and other margin management initiatives. This represents a significant turning point in the year-over-year profit comparisons for this segment given the industry conditions that have weighed on this segment’s results over the past several quarters. In the Commercial Foods segment, the Lamb Weston potato operations continued to post strong growth in sales and profits, demonstrating momentum that we expect to continue into fiscal 2013.” He continued, “As we look to fiscal 2013, we expect good earnings growth. We will lap the pricing increases taken in fiscal 2012, which should benefit the year-over-year organic volume performance for our Consumer Foods segment in the second half of the fiscal year. Contribution from acquisitions completed in fiscal 2012, momentum in our potato operations, moderating inflation, and strong margin management initiatives should allow us to overcome the impact of marketplace challenges.”

Key Stats:

For three consecutive quarters, the company has topped analyst estimates. It beat the mark by 2 cents in the third quarter and by 5 cents in the second quarter.

The company’s loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $271.6 million in the third quarter, a profit of $171.8 million in the second quarter and $85.3 million in the first.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 36 cents per share to 35 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At $1.78 per share, the average estimate for the fiscal year has risen from $1.77 sixty days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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