Stock to Keep Your Eyes on: ConAgra Foods, Inc. (NYSE:CAG)

ConAgra Foods, Inc. (NYSE:CAG) reported earnings for the three months ended Feb2016 on April 07, 2016. The company earned $0.57 per share on revenue of $2.92B. Analysts had been modeling earning per share of $0.58 with $2.85B in revenue.

ConAgra Foods, Inc. (CAG) on April 07, 2016 reported results for the fiscal 2016 third quarter ended February 28, 2016.

Highlights

• Diluted EPS from continuing operations as reported was $0.41, compared with $0.49 in the year-ago period.


• After adjusting for items impacting comparability, diluted comparable EPS of $0.68 this quarter was ahead of $0.59 in the year-ago period. As previously communicated, guidance for this quarter, as well as the basis for comparison in the year-ago period, included contribution from discontinued operations.


• Current quarter diluted EPS from discontinued operations (amounting to $0.05 as reported, and $0.11 adjusted for items impacting comparability) reflects about two months of results from the divested private label operations and includes approximately $36 million of pretax benefit, or $0.05 per diluted share of after-tax benefit, from the absence of private label-related depreciation and amortization expense. As previously discussed, this is due to the classification of the private label assets as held for sale during the quarter. The private label operations were divested during the quarter.


• Consumer Foods improved comparable operating margins by over 300 basis points and drove strong double-digit comparable operating profit growth with a deliberate focus on price/mix, good productivity, and favorable input costs.


• Commercial Foods posted comparable operating profit growth in excess of 20% and expanded margins, reflecting volume increases across the segment as well as lower costs.  Lamb Weston posted good volume performance, reflecting the lapping of the impact of the West Coast port labor dispute.

CEO Perspective:

Sean Connolly, CEO of ConAgra Foods commented, “Our results for the quarter exceeded our expectations as our actions to drive improved profitability continued to take hold. Our focus on improving price/mix and driving efficiencies is enabling us to enhance our overall fundamentals in both of our segments resulting in solid comparable operating profit growth and expanding operating margins.”

He continued, “With the sale of our private label business completed, we are focused on successfully executing our plans to reduce costs and deliver improved price/mix, while continuing to segment our portfolio to enable more impactful marketing and support investments to drive future innovation and deliver improved margins and shareholder value. We are on track to establish two independent segments with excellent operating foundations as we separate into two pure-play companies in the fall.”

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ConAgra Foods, Inc. earnings per share showed a decreasing trend of -489.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 241%.Analysts project EPS growth over the next 5 years at 6.98%. It has EPS annual decline over the past 5 fiscal years of -24.8% when sales grew 5.7. It reported 0.6% sales growth, and -14.8% EPS decline in the last quarter.

The stock is trading at $45.29, up 24.53% from 52-week low of $37.25. The stock trades down -2.89% from its peak of $46.64 and 9.41% above the consensus price target of $49.55. Its volume clocked up at 1.3 million shares which is lower than the average volume of 2.59 million shares. Its market capitalization currently stands at $19.77B.