ConAgra Foods Inc. Earnings Cheat Sheet: Two Straight Quarters of Falling Profit

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

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ConAgra Foods Earnings Cheat Sheet for the Second Quarter

Results: Net income for the processed and packaged goods company fell to $171.8 million (41 cents per share) vs. $200.9 million (46 cents per share) a year earlier. This is a decline of 15% from the year earlier quarter.

Revenue: Rose 8% to $3.4 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CAG reported adjusted net income of 47 cents per share. By that measure, the company beat the mean estimate of 43 cents per share. It beat the average revenue estimate of $3.32 billion.

Quoting Management: Gary Rodkin, ConAgra Foods’ chief executive officer, commented, “We are pleased with our progress in both operating segments. The quarter’s higher-than-planned comparable EPS reflects strong double-digit operating profit growth for our Commercial Foods segment, which has successfully overcome difficult operating conditions and implemented pricing. We are encouraged by our progress in fighting inflation in the Consumer Foods segment; volumes for that segment have performed largely as expected given ongoing price increases. The marketplace environment remains difficult due to continuing inflationary pressures and the impact of the current economy on consumers, so we are cautious about business conditions. Our team is managing through these circumstances well by focusing on net price realization, productivity, and appropriate brand support, and we are confident in our ability to deliver our overall EPS and cash flow expectations for the fiscal year.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 9% to $3.07 billion in the first quarter. The figure rose 11.3% in the fourth quarter of the last fiscal year from the year earlier and climbed 1.9% in the third quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last two quarters. In the first quarter, net income fell 41.7% from the year earlier quarter.

The company beat estimates last quarter after falling short in the previous two quarters. In the first quarter, it missed the mark by 2 cents, and in the fourth quarter of the last fiscal year, it fell short by one cent.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the third quarter is 55 cents per share, up from 52 cents ninety days ago. For the fiscal year, the average estimate has moved down from $1.81 a share to $1.79 over the last ninety days.

Competitors to Watch: General Mills, Inc. (NYSE:GIS), TreeHouse Foods Inc. (NYSE:THS), Lancaster Colony Corp. (NASDAQ:LANC), Kraft Foods Inc. (NYSE:KFT), J&J Snack Foods Corp. (NASDAQ:JJSF), Seneca Foods Corporation (NASDAQ:SENEB), The Hain Celestial Group, Inc. (NASDAQ:HAIN), H.J. Heinz Company (NYSE:HNZ), The J.M. Smucker Company (NYSE:SJM), and Ralcorp Holdings, Inc. (NYSE:RAH).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

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