ConAgra Foods Inc.
), a North American branded and value-added food company, posted
disappointing results for fiscal third quarter 2013. ConAgra's
diluted earnings per share from continuing operations, adjusted
for items impacting comparability were recorded at 55 cents
versus 51 cents reported in the year-ago quarter, increasing by
7.8%. However, earnings missed the Zacks Consensus Estimate of 57
cents by 3.5%.
Net sales improved 13.4% to $3,850.5 million from $3,396.0
million in the year-earlier quarter, driven by increased volumes
and contribution from acquired businesses. Reported revenue
marginally missed the Zacks Consensus Estimate of $3,869.0
On a segmental basis, revenue from
increased 1.3% year over year to $1,255.5 million, led by the
benefit of a favorable price-mix, increased productivity along
with a contribution from the Lamb Weston potato operations.
Revenue from the
segment rose 6.8% to $2,303.2 million during the quarter. The
rise reflects contribution from favorable acquisitions and
price/mix, slightly offset by an organic revenue volume
ConAgra established new segments to represent the revenues
from Ralcorp Holdings acquired in January. Ralcorp Frozen Bakery
Products and Ralcorp Food Group recorded revenues of $79.3 and
$212.5 million, respectively.
In the reported quarter, ConAgra's COGS (cost of goods sold) shot
up 14.1% from the year-earlier quarter to $2,976.5 million.
SG&A (selling, general and administrative) expense was $614.0
million, up 72.1% year over year, due to the integration of
Ralcorp. Operating margin was recorded at 11.8% as against 14.2%
during the year-earlier quarter, resulting from an increase in
Cash and cash equivalents at end of fiscal third quarter 2013
were $723.8 million, an increase from $247.0 million in the
previous quarter. Senior long-term debt increased to $9,649.4
from $3,413.4 million at the end of second quarter of fiscal
2013. The increase was a result of debt incurred to fund the
ConAgra also announced a dividend payment of 25 cents per
share to the shareholders as of Apr 30, to be paid on May 31.
During the quarter, ConAgra acquired Ralcorp Holdings for
$90.0 per share in cash.
For fiscal 2013, ConAgra reaffirmed its earnings per share
(adjusted for items impacting comparability) guidance at $2.15.
It is also expected that Ralcorp will contribute to the earnings
in fiscal 2013 and 2014 to the tune of 5 cents and 25 cents per
ConAgra currently carries a Zacks Rank #2 (Buy). Other stocks
worth a look in the food industry are
Flowers Foods Inc.
), which carries a Zacks Rank #1 (Strong Buy); along with
Campbell Soup Company
BRF - Brasil Foods S.A.
) both of which carry a Zacks Rank #2 (Buy).
BRF-BRASIL FOOD (BRFS): Free Stock Analysis
CONAGRA FOODS (CAG): Free Stock Analysis
CAMPBELL SOUP (CPB): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
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