ConAgra Foods Inc.
) reported mixed financial results for the fiscal first quarter
of 2014. The company reported earnings per share from continuing
operations, adjusted for items impacting comparability, of 37
cents versus 44 cents in the year-ago quarter, representing a
year-over-year decline of 15.9%. Earnings also missed the Zacks
Consensus Estimate of 41 cents by 9.8%.
On a GAAP basis, ConAgra generated earnings per share of 33
cents, declining 45.9% year over year.
: Net sales jumped 27.2% to $4,201.8 million from $3,302.3
million in the year-earlier quarter, mainly driven by
contribution from the Ralcorp acquisition. Reported revenues,
however, missed the Zacks Consensus Estimate of $4,313.0
On a segment basis, revenues from Commercial Foods decreased
0.4% year over year to $1,263.9 million. The increase in flour
milling operations and better product mix were offset by a
decline in the Lamb Weston potato business.
Revenues from the Consumer Foods segment fell 1.8% to $1,995.9
million. The result reflects contribution from favorable
acquisitions which was offset by a decline in the organic volume
and a negative price/mix impact.
The newly established segments to represent the revenues from
Ralcorp Holdings acquired in January mainly led to the top-line
growth. While Ralcorp Frozen Bakery Products generated revenues
of $238.6 million, Ralcorp Food Group recorded revenues of $703.4
million in the reported quarter.
: In the reported quarter, ConAgra's cost of goods sold shot up
38.5% from the year-earlier quarter to $3,370.9 million,
resulting in a gross margin of 19.8%. Selling, general and
administrative expenses were $559.4 million, up 24.2% year over
: Cash and cash equivalents at the end of fiscal first quarter
2014 were $194.2 million, compared with $183.9 million at the end
of fiscal fourth-quarter 2013. Senior long-term debt decreased to
$8,622.2 million from $8,691.0 million at the end of the
For the fiscal first quarter, ConAgra incurred capital
expenditures of $181.1 million, compared with $98.4 million spent
in the year-ago comparable quarter.
During the quarter, ConAgra paid dividends worth $105 million,
compared with $98 million in the year-ago quarter. Total share
repurchased totaled 876,000 shares, worth $31 million.
Subsequent to the quarter end, ConAgra sold one of its smaller
brands, Lightlife, which included vegetarian-based burgers,
hotdogs and other meatless frozen and refrigerated items.
Additionally, the company purchased desert production assets from
a former co-manufacturing partner.
: For fiscal 2014, ConAgra expects its earnings per share
(adjusted for items impacting comparability) in the range of
$2.34 to $2.38. The current expectations reflect a
slower-than-expected start to the fiscal 2014. The company
expects contribution from the Consumer Foods segment as well as
Ralcorp to increase in the coming quarters. Based on this,
ConAgra expects earnings per share of 55 cents in the second
quarter of fiscal 2014.
Ralcorp is expected to generate roughly 25 cents in fiscal
2014, while the company's new venture, Ardent Mills is expected
to lower earnings by roughly 3 cents per share in fiscal
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ConAgra currently carries a Zacks Rank #4 (Sell).
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