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ConAgra (CAG) Beats on Q3 Earnings, Updates FY17 Guidance
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North American food company, Conagra Brands, Inc. (CAG - Free Report) reported mixed third-quarter fiscal 2017 (ended Feb 28, 2017) results.
Over the last three months, shares of this Zacks Rank #2 (Buy) stock yielded a return of 2.31%, as against the loss of 0.45% incurred by the Zacks categorized Food-Miscellaneous Preparation/Diversified industry.
Earnings
In the fiscal third quarter, Conagra’s quarterly earnings from continuing operations, adjusted for items impacting comparability, came in at 48 cents, above the Zacks Consensus Estimate of 45 cents. The bottom line also comfortably surpassed the year-ago tally by 37.1%. The upside was driven by lesser cost of sales, lower selling, general and administrative expenses and reduced interest expense, resulting from lesser debt burden.
Revenues
Conagra generated net revenue of $1,981.2 million in the reported quarter, down 9.9% year over year. The year-over-year decline stemmed from lower volumes accrued due to the company’s initiatives to create an improved quality revenue base. The company’s divestitures and unfavorable foreign currency translation hurt sales by roughly 4.8%.
The top line also missed the Zacks Consensus Estimate of $1,985 million.
Segmental Details
Effective fiscal 2017, ConAgra is reporting results in five reporting segments:
Grocery & Snacks: The segment’s quarterly sales were $849.8 million, down 5.4% year over year.
Refrigerated & Frozen: Quarterly revenues declined 6% year over year to $666.4 million.
International: Sales of the segment came in at $205.2 million, down 3% year over year.
Foodservice: The segment’s quarterly revenues were $259.8 million, down 2.6% year over year.
Commercial: The company did not generate sales from this segment during the quarter. The segment used to include sales generated from the J.W. Swank and Spicetec Flavors & Seasonings businesses. Conagra has divested both the businesses in Jul 2016.
Other Financial Fundamentals
Conagra’s cost of goods sold decreased 13.9% year over year to $1,360.2 million. Selling, general and administrative (SG&A) expenses plunged 21.8% year over year to $349.7 million. Interest expenses plummeted 40.2% to $45.7 million due to lower debt levels.
Adjusted gross profit expanded 190 basis points to 31.6% during the quarter. The upside was driven by favorable input cost, increased supply productivity and better price/mix.
Conagra exited the fiscal third quarter with cash and cash equivalents of $683.6 million, lower than $798.1 million recorded at the end of fiscal 2016. Senior long-term debt (excluding current portion) was $2,645.8 million, down from $4,685.5 million as of May 29, 2016.
In the first nine months of fiscal 2017, Conagra generated net cash of $846.5 million from its operating activities, up from $738.6 million recorded in the year-ago period. Capital spent on additions of property, plant and equipment totaled $158.5 million, up 7.4% year over year.
In the first nine months of fiscal 2017, the company paid dividends worth $328.9 million compared with $323.5 million paid in the prior-year period.
Outlook
Conagra anticipates to report adjusted earnings at or marginally higher than the high-end of $1.65–$1.70 per share range for fiscal 2017. Net sales for fiscal 2017 would likely lie within or slightly at the low-end of the 4–5% range.
Other Stocks to Consider
Some other favorably placed stocks within the industry are listed below:
The Hershey Company (HSY - Free Report) carries a Zacks Rank #2 and has an average earnings surprise of 7.85% for the trailing four quarters.
Energizer Holdings, Inc. (ENR - Free Report) also holds a Zacks Rank #2 and has an average earnings surprise of 20.50% for the past four quarters.
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ConAgra (CAG) Beats on Q3 Earnings, Updates FY17 Guidance
North American food company, Conagra Brands, Inc. (CAG - Free Report) reported mixed third-quarter fiscal 2017 (ended Feb 28, 2017) results.
Over the last three months, shares of this Zacks Rank #2 (Buy) stock yielded a return of 2.31%, as against the loss of 0.45% incurred by the Zacks categorized Food-Miscellaneous Preparation/Diversified industry.
Earnings
In the fiscal third quarter, Conagra’s quarterly earnings from continuing operations, adjusted for items impacting comparability, came in at 48 cents, above the Zacks Consensus Estimate of 45 cents. The bottom line also comfortably surpassed the year-ago tally by 37.1%. The upside was driven by lesser cost of sales, lower selling, general and administrative expenses and reduced interest expense, resulting from lesser debt burden.
Revenues
Conagra generated net revenue of $1,981.2 million in the reported quarter, down 9.9% year over year. The year-over-year decline stemmed from lower volumes accrued due to the company’s initiatives to create an improved quality revenue base. The company’s divestitures and unfavorable foreign currency translation hurt sales by roughly 4.8%.
The top line also missed the Zacks Consensus Estimate of $1,985 million.
Segmental Details
Effective fiscal 2017, ConAgra is reporting results in five reporting segments:
Grocery & Snacks: The segment’s quarterly sales were $849.8 million, down 5.4% year over year.
Refrigerated & Frozen: Quarterly revenues declined 6% year over year to $666.4 million.
International: Sales of the segment came in at $205.2 million, down 3% year over year.
Foodservice: The segment’s quarterly revenues were $259.8 million, down 2.6% year over year.
Commercial: The company did not generate sales from this segment during the quarter. The segment used to include sales generated from the J.W. Swank and Spicetec Flavors & Seasonings businesses. Conagra has divested both the businesses in Jul 2016.
Other Financial Fundamentals
Conagra’s cost of goods sold decreased 13.9% year over year to $1,360.2 million. Selling, general and administrative (SG&A) expenses plunged 21.8% year over year to $349.7 million. Interest expenses plummeted 40.2% to $45.7 million due to lower debt levels.
Adjusted gross profit expanded 190 basis points to 31.6% during the quarter. The upside was driven by favorable input cost, increased supply productivity and better price/mix.
Conagra exited the fiscal third quarter with cash and cash equivalents of $683.6 million, lower than $798.1 million recorded at the end of fiscal 2016. Senior long-term debt (excluding current portion) was $2,645.8 million, down from $4,685.5 million as of May 29, 2016.
In the first nine months of fiscal 2017, Conagra generated net cash of $846.5 million from its operating activities, up from $738.6 million recorded in the year-ago period. Capital spent on additions of property, plant and equipment totaled $158.5 million, up 7.4% year over year.
In the first nine months of fiscal 2017, the company paid dividends worth $328.9 million compared with $323.5 million paid in the prior-year period.
Outlook
Conagra anticipates to report adjusted earnings at or marginally higher than the high-end of $1.65–$1.70 per share range for fiscal 2017. Net sales for fiscal 2017 would likely lie within or slightly at the low-end of the 4–5% range.
Other Stocks to Consider
Some other favorably placed stocks within the industry are listed below:
Blue Buffalo Pet Products, Inc. (BUFF - Free Report) has an average earnings surprise of 6.83% for the last four quarters and currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hershey Company (HSY - Free Report) carries a Zacks Rank #2 and has an average earnings surprise of 7.85% for the trailing four quarters.
Energizer Holdings, Inc. (ENR - Free Report) also holds a Zacks Rank #2 and has an average earnings surprise of 20.50% for the past four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere
1 billion iPhones in 10 years but a new breakthrough is expected to generate more
than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may
kick yourself in 2020. Click here for the 6 trades >>