June 22, 2012

ConAgra income declines by 43%

Accounting charges for pensions have affected results for ConAgra Foods, Inc., leading to a 43% drop in income as the firm swings to a loss during the fourth quarter of 2012.

For the year ended May 27, the company had income of US$467.9 million, equal to US$1.13 per share on the common stock, which compared with income of US$817.6 million, or US$1.90 per share, during fiscal 2011. Sales for the year were US$13.262 billion, up by 8% from US$12.303 billion during the previous year.

"Although the business environment remains challenging, we posted comparable over-year growth for the fiscal fourth quarter, as planned," said Gary Rodkin, chief executive officer. "The Consumer Foods segment posted comparable over-year profit growth for the fiscal fourth quarter due to contribution from acquired businesses, moderating inflation and progress with pricing and other margin management initiatives. This represents a significant turning point in the over-year profit comparisons for this segment given the industry conditions that have weighed on this segment's results over the past several quarters. In the Commercial Foods segment, the Lamb Weston potato operations continued to post strong growth in sales and profits, demonstrating momentum that we expect to continue into fiscal 2013."

During the year the Consumer Foods segment had operating profit of US$1.053 billion, down 7% from US$1.126 billion during the previous year. The segment had sales of US$8.376 billion, down by 5% from US$8.002 billion.

The Commercial Foods segment had an operating profit of US$546.3 million, up by 7% from US$509.5 million during the previous year. The segment had sales of US$4.885 billion, up 14% from US$4.301 billion during the previous year.

During the fourth quarter, the company as a whole suffered a loss of US$86.2 million, which compared with income of US$250.1 million during the same quarter of the previous year. Sales during the quarter were US$3.413 billion, up 6% from US$3.21 billion during the same quarter of the previous year.

"As we look to fiscal 2013, we expect good earnings growth," Rodkin said. "We will lap the pricing increases taken in fiscal 2012, which should benefit the over-year organic volume performance for our Consumer Foods segment in the second half of the fiscal year. Contribution from acquisitions completed in fiscal 2012, momentum in our potato operations, moderating inflation and strong margin management initiatives should allow us to overcome the impact of marketplace challenges."