September 23, 2010

ConAgra income shows decrease

Income for ConAgra Foods fell 12% during Q1 2010 due to inflation and the promotional environment, the company announced on September 21.

For the quarter ended August 29, the company had income of US$146.4 million, equal to 33% per share on the common stock. This was lower than US$165.9 million, or 37% per share, during the same period a year ago. Sales for the quarter were US$2.8 billion, down 2% from US$2.89 billion during the same quarter of the previous year.

"Our fiscal first-quarter margins and EPS (earnings per share) were lower than planned because of an intense promotional environment and inflation that outpaced cost savings," said Gary Rodkin, chief executive officer of ConAgra. "There were, however, several signs of strength in terms of market share and brand sales, demonstrating progress and growth potential for important parts of our portfolio.

"Our plans are to improve the EPS performance in the back half of the year through increased contribution from recently introduced new products and recent acquisitions, productivity initiatives and more effective promotional strategies. Our initiatives, as well as lower SG&A expense, are expected to provide meaningful financial offset to the challenges we face. Furthermore, the positive impacts from a higher-quality potato crop are expected to provide increased year-over-year profitability for the Commercial Foods segment, particularly in the back half of the year."

The Consumer Foods segment had an operating profit of US$214 million, down 14% from US$249.9 million during the same quarter of the previous year. Sales in the segment were US$1.824 billion, down 2% from US$1.86 billion.

The Commercial Foods segment posted operating profit of US$111.8 million, down 17% from US$134.1 million during the same quarter of the previous year. The segment had sales of US$993.4 million, down 3% from US$1.026 billion.

The company said it now expects its full-year adjusted diluted EPS to grow from 5% to 7%.