("ConAgra 4Q Net Down 13% On Hedging Impacts; Margins Jump," published at 8:22 a.m. EDT, misstated hedging results and incorrectly said the first-quarter's earnings could be hurt by a plant explosion. A corrected story appears below.)
DOW JONES NEWSWIRES
ConAgra Foods Inc.'s (CAG) fiscal fourth quarter profit fell 13%
on prior-year earnings from its since-divested trading operations,
but earnings from continuing operations more than doubled on cost
cuts and rising sales.
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 and reiterated first-quarter profit won't 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 had been hurt by hedging losses in recent quarters as
commodity prices tumble from last year's highs. But it recorded a
$9 million gain in the latest period, though sharply lower than the
prior year's $41 million.
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.
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