ConAgra earnings increase despite economic conditions

ConAgra earnings increase despite economic conditions

- Both business segments doing well despite tough economy. - Ralcorp acquisition on track.

CONAGRA Foods Inc. has reported an increase in earnings and sales for its fiscal 2013 second quarter and six months, attributing its performance to acquisitions, good results from its potato operations, a moderation in input cost inflation and "effective management initiatives."

Chief executive officer Gary Rodkin said the company was pleased that both of its operating segments posted earnings growth "in the midst of the current economic conditions."

Rodkin also said ConAgra's planned acquisition of Ralcorp Holdings Inc., which he called a "financially and strategically compelling" deal, is on track to be completed in the first quarter of calendar year 2013.

An agreement to acquire Ralcorp, the largest manufacturer of private-label packaged foods in the U.S., was announced in late November (Feedstuffs, Dec. 3) and remains subject to approval by Ralcorp shareholders and regulatory review.

The acquisition -- a cash transaction valued at $90 per share, or $6.8 billion -- would make ConAgra the second-largest packaged foods company in the U.S., with annual sales totaling $18 billion.

ConAgra's second-quarter and six-month results are shown in the Tables.

For its consumer foods segment, which includes branded and non-branded foods sold through foodservice and retail channels, ConAgra said second-quarter results were driven by acquisitions, a favorable price mix, moderating inflation and margin initiatives.

The company noted that volume should improve sequentially in its third and fourth quarters, reflecting the effect of price increases in fiscal 2012 and the favorable impact of its innovation pipeline and marketing investments.

For its commercial foods segment, which includes products sold to commercial and foodservice accounts worldwide, ConAgra said results were led by a positive price mix, its Lamb Weston potato operations -- which had "notable success" in international markets -- and the pass-through of higher wheat costs in terms of higher flour prices to millers.

ConAgra said it took a hedging loss of $16 million in the quarter, compared with a hedging loss of $27 million in the year-before quarter.

The company also said it repurchased 6.1 million shares of common stock for $170 million but expects to reduce share repurchase activities over the near term due to its planned acquisition of Ralcorp.

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

 

1. ConAgra earnings and sales*

 

-Second quarter-

-Six months-

 

2013

2012

2013

2012

Sales (billion $)

3.736

3.432

7.047

6.537

Earnings (million $)

211.6

180.2

461.7

274.0

Earnings per share ($)

0.51

0.43

1.12

418.4

 

2. ConAgra operating results*

 

-Second quarter-

-Six months-

 

2013

2012

2013

2012

Sales (billion $)

 

 

 

 

Consumer foods

2.423

2.178

4.466

4.070

Commercial foods

1.312

1.254

2.582

2.467

Income (million $)

 

 

 

 

Consumer foods

286.0

256.3

521.3

452.5

Commercial foods

169.3

160.8

308.9

258.3

*For the quarters ended Nov. 25, 2012, and Nov. 27, 2011.

Source for Tables: ConAgra Foods Inc.

 

Volume:84 Issue:54

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