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Sector Update: Consumer

By: MT Newswires
Posted: 2/18/2014 2:07:00 PM
Referenced Stocks: CAG

Consumer stocks were mostly lower, with shares of consumer staples companies in the S&P 500 declining 0.8%. Shares of consumer discretionary firms in the S&P 500 were down about 0.1%.

In company news, ConAgra Foods Inc. ( CAG ) is fractionally lower Tuesday after the processed foods company lowered its outlook for the 12 months ending in May, saying it is taking longer than expected to stabilize hold-over issues in the performance of its private brands segment.

CAG last year bought private-label food maker Ralcorp Holdings Inc. for $4.95 bln. The company also blames weaker-than-expected volumes for the consumer foods division along margin pressure for its commercial foods segment due to poor crop quality for potatoes this season.

The company now expects adjusted earnings of $2.22 to $2.25 per share, down $0.12 from its prior view and now trailing FactSet consensus for $2.35 per share. It also sees Q3 EPS of around $0.60, lagging Street view by $0.05. Q4 earnings are projected at around $0.65 per share, while analysts, on average, are looking for a $0.71 per share profit in Q4.

Shares were off 0.6% to $29.18 each in recent trade, earlier falling within 37 cents - or about 1.3% - of its 52-week low of $28.60 a share.

In other sector news,

(+) LULU, (+0.5%) Raised to Outperform from Perform at Oppenheimer. Price target increased by $10 to $63 a share.

(-) KO, (-3.9%) Adjusted EPS of $0.46 match estimates but lags year-ago levels. Revenue falls 3.6% year over year, trailing consensus by $270 mln.