ConAgra Foods Inc.
) reported strong financial results for the fiscal fourth quarter
of 2013 with a significant year-over-year growth in both the top-
and bottom-line. The company reported earnings per share from
continuing operations, adjusted for items impacting
comparability, of 60 cents versus 51 cents in the year-ago
quarter, representing a healthy year-over-year improvement of
17.6%. Earnings also surpassed the Zacks Consensus Estimate by a
For fiscal 2013, ConAgra reported adjusted earnings per share
of $2.16, beating the Zacks Consensus Estimate by a penny and
increased 17.4% from the year-ago period.
Net sales jumped 33.7% to $4,593.5 million from $3,434.9 million
in the year-earlier quarter, driven by increased volumes in the
Consumer Foods segment and contribution from the Ralcorp
acquisition. Reported revenue, however, missed the Zacks
Consensus Estimate of $4,629.0 million.
On a segment basis, revenue from Commercial Foods increased
3.5% year over year to $1,330.2 million, led by the benefit of a
favorable price-mix, increased productivity and a solid
contribution from the Lamb Weston potato operations and flour
milling operations. However, the increase in Lamb Weston business
was slightly offset by softness in the Asian markets.
Revenue from the Consumer Foods segment rose 7.0% to $2,301.0
million. The rise reflects contribution from favorable
acquisitions and organic volume growth, which was offset by a
negative price/mix impact.
The newly established segments to represent the revenues from
Ralcorp Holdings acquired in January also helped the top-line to
grow. While Ralcorp Frozen Bakery Products generated revenues of
$250.6 million, Ralcorp Food Group recorded revenues of $711.7
million in the reported quarter.
For fiscal 2013, total revenues were $15,491.4 billion,
missing the Zacks Consensus Estimate of $15,769.0 million while
increasing 15.9% compared to fiscal 2012.
In the reported quarter, ConAgra's COGS (cost of goods sold) shot
up 32.0% from the year-earlier quarter to $3,641.7 million,
resulting in a gross margin of 20.7%. SG&A (selling, general
and administrative) expense was $571.0 million, down 26.9% year
Balance Sheet/Cash Flow:
Cash and cash equivalents at the end of fiscal 2013 were $183.9
million, compared to $103.0 million at fiscal-end 2012. Senior
long-term debt increased to $8,691.0 from $2,662.7 million in
For fiscal 2013, ConAgra incurred capital expenditures of
$458.4 million, compared with $336.7 million spent in fiscal
For fiscal 2014, ConAgra expects its earnings per share (adjusted
for items impacting comparability) to be $2.40, indicating a
year-over-year hike of 11.0%. The company expects significant
contribution from the Consumer Foods segment as well as Ralcorp.
Based on this, ConAgra expects an earnings rise of minimum 10.0%
for fiscal 2015-2017. In the long-term, the company expects to
see a sales growth of 3.0%-4.0%, with earnings per share growth
ConAgra currently carries a Zacks Rank #3 (Hold). Other stocks
worth a look in the food industry include
B&G Foods Inc.
Flowers Foods, Inc.
Omega Protein Corp.
), each carrying a Zacks Rank #1 (Strong Buy).
B&G FOODS CL-A (BGS): Free Stock Analysis
CONAGRA FOODS (CAG): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
OMEGA PROTEIN (OME): Free Stock Analysis
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