Commercial Foods drags down ConAgra earnings
June 24, 2010
OMAHA, NEB. — A difficult fourth quarter in the Commercial Foods segment, coupled with restructuring and impairment charges and lower sales, led to a 26% drop in net income for ConAgra Foods, Inc. for the year ended May 30.
For the fiscal year, the company had an income of $723.3 million, equal to $1.63 per share on the common stock, which compared with income of $979 million, or $2.16 per share, during the previous year. Sales for the year were $12,079.4 million, down 3% from $12,426.1 million during the previous year.
“We are pleased with our fiscal year, posting comparable diluted e.p.s. of $1.74 and generating very strong operating cash flow of $1.4 billion,” said Gary Rodkin, chief executive officer. “We grew year-over-year unit and dollar market share in our Consumer Foods segment, reflecting successful sales, innovation and marketing initiatives. This top-line progress, coupled with cost savings initiatives, allowed us to generate strong earnings, invest for the future and more than offset challenges affecting our Commercial Foods segment. We are confident that fiscal 2011 will continue to demonstrate our company’s earnings power and ability to generate strong cash flows.”
For the year the Consumer Foods segment had operating profit of $1,112.6 million, up 17% from $949.4 million during the previous year. Sales for the segment were $8,001.9 million, roughly equal to $7,978.6 million during the previous year.
The Commercial Foods segment posted income of $539 million, down slightly from $542.6 million during the previous year. Sales for the segment were $4,077.5 million, down 8% from $4,447.5 million during the previous year. ConAgra attributed the sluggish earnings to unfavorable product costs at Lamb Weston resulting from a poor-quality potato crop.
For the fourth quarter ended May 30, the company had income of $90.2 million, or 20c per share, down 48% from $174.9 million, or 39c per share, during the same quarter of the previous year. Sales for the quarter were $3,062.5 million, down 5% from $3,224.3 million during the same quarter of the previous year.