ConAgra Foods Q1 Adj. Profit Beats View
Packaged foods company ConAgra Foods, Inc. (CAG) on Tuesday reported a loss for the first quarter, weighed down by a hefty impairment charge at its Private Label operations, which has been reclassified as discontinued operations due to the company's plans to exit this business.
However, adjusted earnings per share for the quarter beat analysts' expectations. Looking ahead, the company forecast adjusted earnings for the second quarter to be approximately in line with the year-ago period and said it will provide more details on its fiscal 2016 earnings outlook once it is further along the process of divesting its private label operations.
The Omaha, Nebraska-based maker of Chef Boyardee pasta, Hunt's ketchup and Peter Pan peanut butter reported net loss for the first quarter of $1.24 billion or $2.85 per share, compared to net income of $482.3 million or $1.12 per share in the prior-year quarter.
The latest quarter's results include loss from discontinued operations of $3.23 per share, reflecting a significant impairment charge for the company's private label operations, related to the reclassification of assets as held for sale.
Excluding items impacting comparability, adjusted earnings for the quarter were $0.45 per share, compared to $0.39 per share in the same period last year.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 1.1 percent to $2.79 billion from $2.76 billion in the same quarter last year. Analysts' consensus revenue estimate for the quarter was $3.67 billion. Consumer Foods sales for the quarter edged down 0.3 percent from last year to $1.70 billion, and Commercial Foods sales grew 3.5 percent to $1.10 billion. ConAgra said that the divestiture process for the private label operations is proceeding as planned, and it expects to have an announcement on the outcome of the process later this fall.
Looking ahead to the second quarter, ConAgra forecast adjusted earnings per share to be approximately in line with the year-ago period. The Street expects the company to earn $0.63 per share for the quarter.
For fiscal 2016, ConAgra said it will provide more details on its earnings per share outlook once it is further along with the process of divesting the private label operations. However, the company added that it expects the Consumer Foods and Commercial Foods segments to post modest comparable operating profit growth for the full year.
Sean Connolly, chief executive officer of ConAgra Foods said, "Our entire organization is focused on delivering long-term top- and bottom-line improvement. Rigorous portfolio segmentation work and improving innovation capabilities should benefit our top line over time, and we are in the midst of developing aggressive cost savings plans to drive improved SG&A, trade spend efficiency, and COGS."
CAG closed Monday's trading at $42.40, up $0.18 or 0.43 percent on a volume of 3.93 million shares. (dpa-AFX)
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