ConAgra Foods today (7 April) reported third-quarter earnings that beat analyst estimates and, according to the US group’s CEO, its own expectations after a focus on price and mix, as well as driving efficiency, improved the Banquet maker’s profitability.
The company booked adjusted earnings per share of US$0.68 for the period to 28 February, up from $0.59 a year earlier, and ten cents higher than analyst forecasts. The figures were adjusted for items including restructuring charges within ConAgra’s consumer foods division.
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On a reported basis, ConAgra’s third-quarter earnings per share were US$0.46, compared to a loss per share of US$2.21 last year. Net income stood at US$204.6m, versus a net loss of US$954.1m in the third quarter of 2014/2015. Last year’s third quarter included impairment charges on ConAgra’s then private-label business, the bulk of which it has now sold to TreeHouse Foods.
Segment operating profit rose 13.6% to US$466.3m, with ConAgra’s consumer foods and commercial foods divisions both seeing an improvement in operating profitability.
ConAgra’s net sales were up 0.6% at US$2.92bn. The company’s consumer foods business, which includes brands like Banquet ready meals and Orville Redenbacher’s popcorn, saw sales fall 2.4%. Sales from its commercial foods unit were up 6.1%.
CEO Sean Connolly said: “Our results for the quarter exceeded our expectations as our actions to drive improved profitability continued to take hold. Our focus on improving price/mix and driving efficiencies is enabling us to enhance our overall fundamentals in both of our segments resulting in solid comparable operating profit growth and expanding operating margins.”
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By GlobalDataConAgra Foods Q3 results by division
Consumer foods
- Sales down 2.4% at US$1.85bn. Volumes 4% lower but ConAgra “emphasised margins over volume” during fiscal year
- Operating profit up 9.5% at US$291.3m. Price/mix, “good productivity” and lower commodity costs help.
Commercial foods
- Sales 6.1% higher at US$1.07bn. Lamb Weston potato sales rise at home and abroad. Boost from lapping for West Coast port dispute
- Operating profit rises 21.1% to US$175m. Lamb Weston boosts profitability.
