ConAgra Tops Expectations As Food Maker Reshapes Company
April 07 2016 - 8:50AM
Dow Jones News
ConAgra Foods Inc. swung to a profit in its latest quarter,
topping expectations and suggesting the company's efforts to remake
itself are paying off.
Shares rose 0.4% to $8.16 in light premarket trading.
The Omaha-based food maker, known for brands including Slim Jim
snacks, Banquet frozen meals and Peter Pan peanut butter, has been
reshaping its business as its grapples with consumers' increasing
preference toward foods that are perceived as more natural and
healthful and away from packaged options.
In February, ConAgra completed its $2.7 billion sale of its
private label business to TreeHouse Foods. ConAgra bought the
business, which makes cereal, pasta, condiments for supermarkets to
use as their house brands, about three years earlier for $5 billion
and faced pressure from activist investor Jana Partners to shed
it.
Chief Executive Sean Connolly said Thursday that with the sale
of the private-label business closed, the company is focused on
executing cost cuts and further segmentation of its portfolio.
ConAgra previously announced plans to cut $300 million in annual
costs that included 1,500 layoffs, and it is in the process of
spinning of its Lamb Weston frozen-potato line. The split will rid
ConAgra of most of its existing business selling foods to
restaurants and other commercial customers, and it will separate
ConAgra into two independent companies. Mr. Connolly said the move
is on track to be completed in the fall.
In its latest quarter, sales in the commercial business rose 6%
from a year earlier to $1.1 billion, driven by "notably strong"
Lamb Weston sales. That increase offset a 2% revenue decline in the
branded foods segment, where volume fell 4% and currencies took 1%
off sales.
Overall, ConAgra reported a profit of $204.6 million, or 46
cents a share, up from a year-earlier loss of $954.1 million, or
$2.23 a share. Excluding restructuring charges, among other items,
earnings were 68 cents a share, up from 59 cents.
Revenue edged 0.6% higher to $2.92 billion. Analysts projected
58 cents in adjusted earnings per share and $2.86 billion in sales,
according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
April 07, 2016 08:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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