ConAgra lowers second-quarter e.p.s. expectations
OMAHA — ConAgra Foods, Inc. has lowered its expectations for its fiscal 2011 second-quarter diluted earnings-per-share guidance, to approximately 45c from 54c previously. In lowering its forecast, ConAgra cited difficult category conditions, softer-than-planned response to promotions, and higher-than-planned inflation in the Consumer Foods segment. Weaker-than-expected profits from the Lamb Weston specialty potato operations in the Commercial Foods segment also negatively impacted results, the company said.
ConAgra also said it expects earnings per share will rise in the low single digits, from prior guidance of a 5% to 7% gain from a year ago, when the company earned $1.74 per share. The downward revision reflects weaker-than-planned first-half e.p.s. results, as well as earnings dilution resulting from early payment of payment-in-kind notes receivable by a debtor, ConAgra said.
Looking ahead, the company expects a year-over-year increase in operating profit in the second half of fiscal 2011 based on several factors, including net pricing increases under way; accelerating contribution from innovation and acquired businesses; stronger second-half cost savings along with lower selling, general, and administrative expenses; and improved profitability for Lamb Weston driven by a higher-quality potato crop, which the company recently began processing.