We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Conagra Brands (CAG) Up 2.8% Since Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Conagra Brands Inc. (CAG - Free Report) . Shares have added about 2.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is CAG due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Third-Quarter Fiscal 2018 Results
Conagra reported mixed results for third-quarter fiscal 2018 (February 2018).
Earnings
In the fiscal third quarter, Conagra’s quarterly adjusted earnings from continuing operations were 61 cents, surpassing the Zacks Consensus Estimate of 56 cents. Also, the bottom line was 27.1% higher than the year-ago tally.
Revenues
Conagra generated net revenues of $1,994.5 million in the reported quarter, missing the Zacks Consensus Estimate of $2,010 million. However, the top line marginally exceeded the year-ago tally by 0.7%.
Segmental Details
Grocery & Snacks: The segment’s quarterly sales were $838.3 million, down 1.3% year over year.
Refrigerated & Frozen: Quarterly revenues were up 3.2% year over year to $688.5 million.
International: Sales of the segment were $223.4 million, up 8.9% year over year.
Foodservice: The segment’s quarterly revenues totaled $244.3 million, down 6% year over year.
Other Financial Fundamentals
Conagra’s cost of goods sold was up 2.6% year over year to $1,395.7 million. Adjusted gross profit contracted 160 basis points (bps) to 30% during the reported quarter.
Selling, general and administrative (SG&A) expenses dropped 5.6% year over year to $330.2 million. Interest expenses dipped 12.7% to $39.8 million due to lower debt levels.
Conagra exited the fiscal third quarter with cash and cash equivalents of $132.9 million, lower than $251.4 million recorded at the end of fiscal 2017. Senior long-term debt (excluding current portion) was $3,037 million, up from $2,573.3 million reported as of May 28, 2017.
In the nine-month period ended fiscal 2018, Conagra generated net cash of $842.3 million from operating activities, slightly down from $846.5 million reported in the year-earlier period. Capital spent on additions of property, plant and equipment totaled $175.9 million, up 11% year over year.
During the fiscal third quarter, Conagra repurchased nearly 8 million common stock for $280 million.
Outlook
Conagra intends to enhance its near-term profitability on the back of stronger top-line performance. It believes new merchandising, distribution and consumer trail-related investments will bolster the sales of its major brands. However, input cost inflation and flaring up transportation expenses are expected to drag down margins in the upcoming quarters.
The company anticipates reporting adjusted earnings to be $2.03-$2.05 per share for fiscal 2018, higher than the previously-stated range of $1.84-$1.89 per share. Moreover, Conagra expects to buy back common stock worth $1.1 billion in the fiscal.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, CAG has a nice Growth Score of B, however its Momentum is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
CAG has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Conagra Brands (CAG) Up 2.8% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Conagra Brands Inc. (CAG - Free Report) . Shares have added about 2.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is CAG due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Third-Quarter Fiscal 2018 Results
Conagra reported mixed results for third-quarter fiscal 2018 (February 2018).
Earnings
In the fiscal third quarter, Conagra’s quarterly adjusted earnings from continuing operations were 61 cents, surpassing the Zacks Consensus Estimate of 56 cents. Also, the bottom line was 27.1% higher than the year-ago tally.
Revenues
Conagra generated net revenues of $1,994.5 million in the reported quarter, missing the Zacks Consensus Estimate of $2,010 million. However, the top line marginally exceeded the year-ago tally by 0.7%.
Segmental Details
Grocery & Snacks: The segment’s quarterly sales were $838.3 million, down 1.3% year over year.
Refrigerated & Frozen: Quarterly revenues were up 3.2% year over year to $688.5 million.
International: Sales of the segment were $223.4 million, up 8.9% year over year.
Foodservice: The segment’s quarterly revenues totaled $244.3 million, down 6% year over year.
Other Financial Fundamentals
Conagra’s cost of goods sold was up 2.6% year over year to $1,395.7 million. Adjusted gross profit contracted 160 basis points (bps) to 30% during the reported quarter.
Selling, general and administrative (SG&A) expenses dropped 5.6% year over year to $330.2 million. Interest expenses dipped 12.7% to $39.8 million due to lower debt levels.
Conagra exited the fiscal third quarter with cash and cash equivalents of $132.9 million, lower than $251.4 million recorded at the end of fiscal 2017. Senior long-term debt (excluding current portion) was $3,037 million, up from $2,573.3 million reported as of May 28, 2017.
In the nine-month period ended fiscal 2018, Conagra generated net cash of $842.3 million from operating activities, slightly down from $846.5 million reported in the year-earlier period. Capital spent on additions of property, plant and equipment totaled $175.9 million, up 11% year over year.
During the fiscal third quarter, Conagra repurchased nearly 8 million common stock for $280 million.
Outlook
Conagra intends to enhance its near-term profitability on the back of stronger top-line performance. It believes new merchandising, distribution and consumer trail-related investments will bolster the sales of its major brands. However, input cost inflation and flaring up transportation expenses are expected to drag down margins in the upcoming quarters.
The company anticipates reporting adjusted earnings to be $2.03-$2.05 per share for fiscal 2018, higher than the previously-stated range of $1.84-$1.89 per share. Moreover, Conagra expects to buy back common stock worth $1.1 billion in the fiscal.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Conagra Brands Inc. Price and Consensus
Conagra Brands Inc. Price and Consensus | Conagra Brands Inc. Quote
VGM Scores
At this time, CAG has a nice Growth Score of B, however its Momentum is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
CAG has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.