Omaha, NE - ConAgra, Inc. reported results for fiscal year 1999's second quarter and first half ended November 29, 1998.
Fiscal 1999 second quarter diluted earnings per share were 46 cents, equaling 46 cents in fiscal 1998's second quarter as reported a year ago and as restated for pooling of interests with four businesses that subsequently merged with ConAgra. Fiscal 1999 first half diluted earnings per share were 69 cents, down 1.4 percent from 70 cents in fiscal 1998's first half as reported a year ago, and down 2.8 percent from 71 cents in fiscal 1998's first half as subsequently restated.
ConAgra's chairman and CEO, Bruce Rohde, commented, “ConAgra's Refrigerated Foods business segment began its anticipated recovery in the second quarter and more than offset a shortfall in Food Inputs & Ingredients. Our Grocery & Diversified Products business segment performed about as expected in the second quarter. Our plan for earnings growth this year is geared largely to restoring ConAgra's earnings balance via substantial second half improvement in Refrigerated Foods. Consequently, Refrigerated Foods' second quarter upturn bolsters ConAgra's prospects for a strong second half of fiscal 1999.”
In the following review of fiscal 1999 second quarter and first half results, comparisons are with fiscal 1998 second quarter and first half results restated for pooling of interests unless otherwise indicated.
In ConAgra's Grocery & Diversified Products industry segment, operating profit was up 5 percent in the second quarter and 9 percent in the first half of fiscal 1999 versus the same periods in fiscal 1998 before restatement. On a restated basis, operating profit increased 1.5 percent in the second quarter and 4.5 percent in the first half. Segment sales increased 10 percent in fiscal 1999's second quarter and first half before restatement. On a restated basis, sales increased 2 percent in the second quarter and 1 percent in the first half.
ConAgra's frozen foods businesses boosted unit volumes and operating profit in fiscal 1999's second quarter and first half. In ConAgra Foodservice Sales Company, which includes Lamb-Weston potato products, operating profit was down slightly in the second quarter and up in the first half. ConAgra Grocery Products, the shelf-stable foods group, equaled prior year operating profit in both periods.
In ConAgra's Refrigerated Foods business segment, operating profit was up 46 percent in the second quarter and 9 percent in the first half of fiscal 1999 versus the same periods in fiscal 1998. Segment sales increased 2 percent in the second quarter and 1 percent in the first half. Net of sales added by acquisitions, lower pork and beef raw materials prices passed through as lower selling prices reduced segment sales nearly 2 percent in the second quarter and over 2 percent in the first half.
The branded packaged meats business increased unit volumes and operating profit in fiscal 1999's second quarter and first half. An acquisition contributed to strong second quarter and first half operating profit growth in the cheese and tablespreads business.
Pork products, poultry products and Australia beef raised operating profit substantially in fiscal 1999's second quarter and first half. U.S. beef operating profit was down substantially in both periods, though the year-over- year profit decline in dollars narrowed considerably in the second quarter.
In ConAgra's Food Inputs & Ingredients business segment, operating profit was down 16 percent in the second quarter and 3 percent in the first half of fiscal 1999 versus the same periods in fiscal 1998. Segment sales decreased 14 percent in the second quarter and 1 percent in the first half. Business dispositions, lower commodity selling prices and sales reclassification reduced segment sales over 4 percent in both periods. A shift in crop input sales from the second quarter to the first quarter of fiscal 1999 also was a major factor in the segment's second quarter sales decline.
ConAgra's major crop inputs business, United Agri Products, increased operating profit in fiscal 1999's second quarter and first half. In the ingredients sector, second quarter and first half operating growth in international operations, specialty food ingredients and corn processing was more than offset by a sharp decline in grain merchandising and commodity services operating profit in both periods.
For ConAgra in total, fiscal 1999 second quarter net income was $219.0 million, up 1 percent from $217.2 million in fiscal 1998's restated second quarter, and up 4 percent from $210.6 million before restatement. Fiscal 1999 first half net income was $328.3 million, down 2 percent from $335.5 million in fiscal 1998's restated first half, and up 2 percent from $320.8 million before restatement.
Fiscal 1999 second quarter net sales were $6.40 billion, down 2 percent from $6.55 billion in fiscal 1999's restated second quarter, and down .5 percent from $6.43 billion before restatement. Fiscal 1999 first half net sales were $12.89 billion, up .6 percent from $12.81 billion in fiscal 1998's restated first half, and up 2.5 percent from $12.57 billion before restatement.
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