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ConAgra Foods (CAG) Q2 Earnings Top Consensus, Revises 2013 View

 December 20, 2012 08:06 AM

(By Balaseshan) ConAgra Foods Inc. (NYSE: CAG) reported stronger-than-forecast quarterly earnings helped by sales growth at its consumer and commercial food segments, and the company revised its earnings forecast for fiscal 2013 to the top-end of previous guidance.

On an adjusted basis, earnings per share from continuing operations for the second quarter jumped 16 percent to 57 cents, topping market expectations of 55 cents. The company posted a 18.6 percent rise in EPS from continuing operations to 51 cents on a net basis from 43 cents in the the year-ago quarter.

Total sales rose 8.7 percent to $3.74 billion, coming in above expectations of a 8.4 percent growth. Sales at the company's consumer and commercial food segments advanced 11.0 percent and 5 percent, respectively.

[Related -Hertz (HTZ) Investors Hurting As Stock Tumbles On Revised Annual Forecast, ConAgra (CAG) calls active]

Looking ahead for fiscal 2013, ConAgra now expects adjusted EPS to be at least $2.06, while Street analysts predict $2.07. Previously, the company had predicted adjusted EPS of $2.03 to $2.06.

The company said this revised outlook includes a strong year-over-year increase in marketing investment, and does not include any fiscal 2013 EPS benefit from acquiring Ralcorp (NYSE: RAH), which will be determined in due course after the transaction closes.

ConAgra continues to expect operating cash flow in excess of $1.2 billion for the fiscal year, excluding any 2013 cash flow from acquiring Ralcorp. The company said its planned acquisition of Ralcorp for $90 per share in cash is on track to close in the first quarter of calendar 2013.

[Related -Conagra Foods, Inc. (CAG): Too Much Downside To Consider Buying Weakness]

"We are very excited about the pending acquisition of Ralcorp, which we announced on Nov. 27, 2012, given the strategically and financially compelling nature of the acquisition. The acquisition is expected to close in the first quarter of calendar 2013, and we look forward to updating our investors on the financial benefits of the acquisition in due course," said Gary Rodkin, chief executive of ConAgra Foods.

The Omaha, Nebraska-based company's brands include: Alexia, Banquet, Lamb Weston, Healthy Choice and Snack Pack, among others.

The stock, which has been trading in the 52-week range between $23.64 and $30.55, ended Wednesday's regular trading at $29.96.



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