US packaged food company ConAgra Foods has said a number of factors, including higher costs and production problems, are negatively impacting its earnings outlook for the third quarter to 27 February.
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The company said it has experienced continued success this fiscal year across several key brands and product types due to the growth initiatives underway. At the same time, a combination of factors are negatively impacting third quarter performance.
These factors include continued weak results for ConAgra’s refrigerated branded meat operations, reflecting a spike in input costs in a difficult pricing environment. The company said production and order fulfilment issues within the retail and foodservice product segments were also causing a problem, mainly due to stronger-than-anticipated consumer demand for several items at a time when the company is making changes in its manufacturing network.
The company currently expects such operating items to negatively impact third-quarter earnings by more than US$50m after-tax, which is in the range of 10 cents per share.
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By GlobalData
