Reporting its full year results today (26 June) ConAgra emphasised the strong performance of its continuing operations, which saw diluted EPS grow 38%.
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Earnings per share for the fourth-quarter increased from $0.31 in the same period of last year to $0.41. While the group saw strong earnings growth from its continuing operations, EPS included $0.23 per share of net income from discontinued operations, including the recently sold commodity-trading unit.
ConAgra said its revenue jumped 15.2% to $3.08bn in the fourth quarter, up from $2.67bn a year ago.
ConAgra’s consumer foods segment, which accounted for 59% of full year sales, saw volumes fall 1% but benefitted from pricing increases. The segment posted comparable sales growth of 4%, with revenue rising to $1.7bn and operating profit of $167m in the fourth quarter.
The company said gains were driven by price increases. While ConAgra has embarked on a cost-cutting programme, the group admitted that any savings were “more than offset” by cost inflation of about $150m.
ConAgra’s ingredients unit, which accounted for 35% of full year sales, saw sales rise to $1.2bn – a 32% increase.
The company said that it has successfully passed higher wheat prices on. Segment operating profit for the fourth quarter came in 9% above the fourth quarter of fiscal 2007, at $115m.
The company’s international foods division also saw sales growth, with sales rising 17% to $185m. The weak dollar contributed 7% to sales growth.
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By GlobalDataHowever operating profit of $11m was 39% below last year profits, primarily due to restructuring costs of $10m.
Looking to the coming year, ConAgra said that it was confident of further sales growth thanks to investment in innovation and marketing.
Gary Rodkin, chief executive officer, commented: “In fiscal 2008, we made progress in several important areas of our company, most notably pricing, the innovation pipeline, more effective marketing, and efficiencies.
“Given the operating progress made this fiscal year as well as the recent divestiture of our Trading & Merchandising operations, we have an even greater focus on successfully executing the initiatives in our core food operations, as well as a much stronger foundation on which to deliver predictable and sustainable profitable growth going forward.”
The company said it expects EPS from continuing operations, excluding items impacting comparability, to be in the range of $1.56-$1.59 in fiscal 2009.
