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ConAgra Foods Lowers Financial Expectations

11 September 2013

US - US meat and food processor ConAgra Foods has lowered its expectations for the 2014 financial year.

The food processing giant has forecast earnings per share of $2.34-$2.38 down from the previous forecast of $2.40.

The company said that the revised estimates represent eight to 10 per cent growth compared to 2013 when earnings per share were $2.16 and diluted earnings per share were $1.85.

The revised outlook reflects lower than planned fiscal first-quarter earnings per share, which were $0.33 as reported, and $0.37 adjusted for items impacting comparability.

The company said that while challenging industry conditions have weighed on overall results, the softer-than-planned first-quarter comparable EPS performance principally relates to the Consumer Foods segment, where difficult conditions for some branded retail categories and some customers have negatively impacted sales and profits.

Unit volumes for that segment in the fiscal first quarter were below levels a year ago and below the company’s original plans.

The company is adjusting its merchandising, promotion, and pricing strategies for its retail brands to improve the Consumer Foods segment’s sales and profit performance as the 2014 financial year progresses.

The company has also begun implementing aggressive cost management initiatives.

The input cost environment for the remainder of fiscal 2014 has improved from earlier projections, which is also expected to improve the Consumer Foods segment’s financial performance in fiscal 2014.

The company’s near-term capital allocation goals, which include significant debt retirement in fiscal years 2014 and 2015, and its fiscal 2015-2017 EPS growth plans, which include realising significant synergies from the Ralcorp acquisition, remain intact and are not impacted by the revision to the fiscal 2014 EPS estimates.

The company is finalising the financial details of the fiscal 2014 first-quarter performance and will discuss actual performance and more details with the regularly scheduled earnings release on 19 September.

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