US packaged foods company ConAgra Foods has said earnings for its fiscal 2005 fourth quarter, which ended 29 May, will be lower than expected due to continued weak profitability in its packaged meats operations.
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Those operations continue to be negatively impacted by high protein input costs coupled with inadequate pricing management, the company said. Because the expected improvement in the packaged meats business did not materialise, contribution from the packaged meats operations in the fourth quarter will be in the range of $0.10 per share lower than the company expected when it made previous comments regarding the fourth quarter. However, ConAgra did not provide a specific number because results are not yet final.
The company previously expected aggressive pricing management to improve packaged meats results in the fourth quarter. However, the pricing actions that were taken were inadequate and were not executed to expectations, ConAgra said, adding that it has made several significant personnel changes in its packaged meats operations and expects those changes, along with better pricing management and aggressive cost-savings initiatives to improve the packaged meat operations over time.
As part of ongoing efficiency initiatives, the company said it is reducing general and administrative expense as well as salaried headcount.
“The company is in the process of eliminating several hundred salaried jobs across the organization; these headcount reductions will be largely complete by the end of the first quarter of fiscal 2006, which ends August 2005,” ConAgra said.
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By GlobalData
