SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community

CHANNEL BY TOPICS


QUICK LINKS




Associated Press Featured Article

September 24, 2010

ConAgra disappoints in 1st quarter


PORTLAND, Ore. (AP) — ConAgra Foods Inc. reported a disappointing first quarter on Tuesday, saying intense discounting and higher costs pushed the food maker's net income down 12 percent.

The maker of Banquet, Chef Boyardee, Peter Pan and other packaged foods reported that it earned $146.4 million, or 33 cents per share, for the quarter. That's down from $165.9 million, or 37 cents per share, in the same quarter last year.

ConAgra's revenue fell 2 percent to $2.82 billion.

The results missed analysts' average expectation for earnings of 39 cents per share on revenue of $2.96 billion, and ConAgra's shares dropped almost 4 percent.

"Make no mistake about it, I am disappointed in our performance," Gary Rodkin, ConAgra's CEO, said during a conference call with investors. "We have already and will continue to make adjustments, but I am confident in ... our ability to operate in this environment."


As consumers continue to tighten their purse strings and whittle down their pantries, manufacturers and retailers have discounted their products more heavily to drive sales. At ConAgra, that discounting and higher costs for materials and other items cut into the company's margins.

Revenue for its consumer foods division, which accounts for about 65 percent of ConAgra's business, fell 2 percent to $1.82 billion. And its commercial division, which has struggled for some time with weakness in the restaurant industry, saw revenue fall 3 percent $993 million. The company's Lamb Weston specialty potato segment had higher sales and unit volume than a year earlier, but its operating profit was hurt by costs resulting from a poor–quality potato crop.

ConAgra leaders said they expect results to improve significantly in the remainder of the fiscal year as the company begins processing a new potato crop and some other costs moderate. The company also said it expects retailers and its competitors to offer fewer discounts.

"The more intense value mindset of consumers is here to stay," Rodkin said. "The food industry, both manufacturers and retailers, will not win by continuously dropping prices. Value does not just mean a cheaper price, it is much more holistic."

Rodkin said this new mindset of shoppers means that, instead of relying on discounts, the company must demonstrate the inherent value in its products, whether the low cost of $1 Banquet meals and 25–cent servings of Snack Pack pudding, the nutritional value of Egg Beaters or Healthy Choice or the quality of Hunt's tomatoes.

The company will place more emphasis on innovation, marketing, promotions and productivity.

"We understand the changed marketplace, and our portfolio is capable of succeeding in it," Rodkin said.

ConAgra said it expects its full–year net income to rise 5 percent to 7 percent, pulling back from prior guidance of 8 percent to 10 percent growth. That implies net income of $1.83 to $1.86 per share, short of the $1.89 per share analysts expected.

ConAgra, based in Omaha, Neb., also announced a quarterly dividend.

Shares fell 80 cents, about 3.6 percent, to close Tuesday at $21.57.

___

AP Business Writer Mae Anderson contributed to this report from New York.

Related Images:


 FILE - In the file photograph taken March 24, 2010, Montana Sapphire All Purpose Flour by ConAgra Mills lies on a shelf for sale at the Heinen's grocery store in Bainbridge Twp. Food maker ConAgra Foods Inc. said Tuesday, Sept. 21, 2010, that tight competition, inflation and a sluggish retail environment pushed first quarter net income down 12 percent. (AP Photo/Amy Sancetta, file)



FEATURED ARTICLES

OTHER NEWS PROVIDERS







Technology Marketing Corporation

2 Trap Falls Road Suite 106, Shelton, CT 06484 USA
Ph: +1-203-852-6800, 800-243-6002

General comments: [email protected].
Comments about this site: [email protected].

STAY CURRENT YOUR WAY

© 2024 Technology Marketing Corporation. All rights reserved | Privacy Policy