DOW JONES NEWSWIRES
ConAgra Foods Inc.'s (CAG) fiscal fourth quarter profit fell 13%
on continued hedging losses, though earnings excluding them more
than doubled on cost cuts and rising sales.
And while the maker of Chef Boyardee pasta, Hunt's ketchup and
Peter Pan peanut butter projected earnings for the new year at or
above analysts' expectations, ConAgra said the first-quarter profit
could be hurt by the fatal plant explosion earlier this month at a
North Carolina plant that makes Slim Jim meat snacks.
Shares rose 2.6% premarket to $20.55. The stock through
Wednesday was up 21% this year.
ConAgra has been hurt by hedging losses as commodity prices
tumble from last year's highs, in addition to consumers cutting
back on eating out. Although packaged-food makers have shown
resilience in recent quarters as they have raised prices, the
outlook for the industry has dimmed with growing sales of cheaper
generic store brands.
The latest quarter included $31 million of mark-to-market losses
while the prior year had a $41 million gain.
For the period ended May 31, which included an extra week of
sales, earnings fell to $174 million, or 39 cents a share, from
$201 million, or 41 cents a share, a year earlier. Earnings from
continuing operations, excluding items such as hedging impacts and
debt-retirement costs, rose to 41 cents a share from 18 cents.
Sales rose 7.5% to $3.3 billion.
Analysts polled by Thomson Reuters expected earnings, excluding
items, of 41 cents on revenue of $3.33 billion.
Gross margin jumped to 25% from 21.1%.
Sales in the consumer-foods unit - its largest - rose 14%, with
volume up 7% and profit surging 40% on cost cuts and lower
commodity prices. Commercial-foods sales fell 2.4%, but earnings
jumped 35% as cost savings also helped that business.
For the coming year, ConAgra projected earnings of $1.63 a share
to $1.66 a share; analysts projected $1.63.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com