ConAgra Tops Q2 Estimates, Misses Sales Target


ConAgra Foods Inc. (CAG) beat profit estimates for the second quarter, the company announced on Tuesday. The higher profit was boosted by lower commodity expenses and cost-cutting measures as the food giant makes the shift to healthier, less processed foods.

ConAgra made the decision to implement a major restructuring plan earlier in the year after facing increased pressure from Jana Partners LLC, an activist hedge fund. The restructuring included a spinoff of its Lamb Weston business and the sale of its private label division. The company will also cut 1,500 jobs to save $300 million over the next three years.

Despite reporting a higher profit, ConAgra posted lower-than-expected revenue for the third quarter in a row. Sales in its consumer foods division plummeted 3% in the second quarter.

Operating profit did grow 10% due to fixed reduced commodity costs and higher prices. Net income jumped to $154.9 million, or $.35 a share, up from $10 million ($0.2 cents a share) the previous year.

In 2014, ConAgra posted a $202.8 million loss due to poor performance from its private-label unit.

Excluding certain items, ConAgra earned $.71 per share in the quarter. Analysts were looking for $.62 a share. Total sales declined 1.4% to just $3.09 billion. Analysts were looking for $3.3 billion dollars in sales.


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