* Q3 adj EPS 51 cents vs Wall Street estimate of 49 cents
* Sees "modest" EPS growth in 4th qtr
* Stands by full-year 2012 earnings growth target
* Shares down 1 pct
By Martinne Geller
March 22 ConAgra Foods Inc lowered its
profit expectations for the current quarter as higher prices for
packaged food curb demand.
Shares of the maker of Banquet frozen meals, Chef Boyardee
pasta and Hebrew National hot dogs were down 1 percent at midday
Like all food companies, ConAgra has been hurt by soaring
costs for raw materials from grain to meat to fuel. In an effort
to pass some of those costs on to consumers, ConAgra has raised
prices on many of its goods, which has hurt sales volume.
"Conditions have been difficult across the industry due to
high inflation and soft volumes for retail consumer food
brands," said ConAgra Chief Executive Gary Rodkin in a
Business conditions remain difficult and have softened the
company's near-term earnings outlook, ConAgra added, saying it
expected "modest" earnings growth in the fourth quarter.
"We have downwardly revised our outlook for Q4," Chris
Klinefelter, ConAgra's vice president of investor relations,
told analysts on a conference call. He said "modest" probably
meant growth in the single-digit range.
That would lead ConAgra to post low single-digit growth for
the full year, which is still within the company's stated goal
of low- to mid-single digit growth.
PRICE INCREASES HELP REVENUE, HURT VOLUME
In the fiscal third quarter ended on Feb. 26, ConAgra's net
income rose to $271.6 million, or 65 cents per share, from
$214.8 million or 50 cents per share a year earlier.
Excluding items, earnings were 51 cents per share, topping
analysts' average estimate of 49 cents per share, according to
Thomson Reuters I/B/E/S.
Its sales rose 7 percent to $3.37 billion. Analysts had
expected $3.35 billion.
In the consumer foods segment, which accounts for nearly
two-thirds of sales and supplies stores and foodservice
channels, sales rose 4 percent, helped by recent acquisitions. A
5 percentage-point decline in sales volume muffled the benefit
of price increases.
In the commercial foods segment, which sells potato
products, seasonings and milled grain products to food service
and other commercial channels, sales jumped 14 percent. ConAgra
cited higher sales volume for its Lamb Weston potatoes and price
ConAgra shares were down 1 percent at $26.10 on the New York
Stock Exchange at midday.