ConAgra cites acquisition, integration costs

ConAgra cites acquisition, integration costs

- ConAgra ups marketing investment 33%. - Improved mix and pricing help results. - Ralcorp to be split into bakery and food units.

CONAGRA Foods Inc., the largest private-label packaged food company in the U.S., has reported decreased earnings for its fiscal 2013 third quarter, citing acquisition, integration and restructuring costs.

The company also cited expenses related to hedging activities and taxes related to acquisitions and other costs. Excluding these costs and benefits to earnings in the year-before quarter, ConAgra said earnings would have been even with year ago.

The company reported improved profits for its first nine months.

ConAgra's results, shown in the Tables, include 27 days of earnings from Ralcorp Holdings Inc., the largest private-label packaged food company in the U.S., which ConAgra acquired on Jan. 29 (Feedstuffs, Feb. 4). The acquisition made ConAgra the second-largest packaged food company in the U.S.

The company noted that it has organized the acquisition into a Ralcorp frozen bakery group and a Ralcorp food group.

For its consumer foods segment, which includes branded and non-branded foods sold to foodservice and retail customers, ConAgra attributed third-quarter results to acquisitions and an improvement in mix and pricing but pointed to a decline in volume.

The company noted that it increased its marketing investment in its base business 33%, reflecting a planned commitment to building long-term brand strength.

Brands that grew sales in the quarter included Hebrew National, Marie Callender's and Slim Jim.

For its commercial foods segment, which includes milled grain products, specialty potatoes, blends, flavors and seasonings sold to commercial customers, ConAgra said its milling operations benefited from good market conditions, higher volumes, an improved mix and "excellent productivity."

The company noted that, subsequent to the third quarter, which ended Feb. 24, it contributed its milling operations to a joint venture with Cargill Inc. and CHS Inc., forming Ardent Mills (Feedstuffs, March 11). Cargill and ConAgra each will hold 44% of Ardent Milling, and CHS will hold the remaining 12%.

ConAgra said its Lamb Weston potato business experienced an improved mix and pricing that more than offset lower volumes due primarily to softness in key markets in Asia.

ConAgra also announced that its board of directors has authorized a cash dividend of 25 cents per share on the company's common stock, payable May 31 to holders of record April 30.

ConAgra, headquartered in Omaha, Neb., reported fiscal 2012 sales of $14 billion.

 

1. ConAgra earnings and sales*

 

-Third quarter-

-Nine months-

 

2013

2012

2013

2012

Sales (billion $)

3.851

3.396

10.898

9.933

Earnings (million $)

120.0

280.1

581.7

554.1

Earnings per share ($)

0.29

0.67

1.40

1.32

 

2. ConAgra operating results (million $)*

 

-Third quarter-

-Nine months-

Sales

2013

2012

2013

2012

Consumer foods

2,303.2

2,157.2

6,768.9

6,227.1

Commercial foods

1,255.5

1,238.8

3,837.2

3,705.9

Ralcorp foods

212.5

--

--

--

Ralcorp frozen bakery

79.3

--

--

--

Operating income

 

 

 

 

Consumer foods

284.4

331.3

805.7

783.8

Commercial foods

166.6

150.0

475.5

408.3

Ralcorp foods

3.6

--

--

--

Ralcorp frozen bakery

1.4

--

--

--

*For the quarters ended Feb. 24, 2013, and Feb. 26, 2012.

 

Volume:85 Issue:15

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