990386 ConAgra Reports 3rd Quarter & 9-Month Results

Omaha, NE - ConAgra, Inc. reported results for fiscal year 1999's third quarter and first nine months ended February 28, 1999.

Fiscal 1999's third quarter diluted earnings per share were 36 cents, up 20% from 30 cents in fiscal 1998's third quarter as reported a year ago, and up 29% from 28 cents as subsequently restated for pooling of interests with four businesses that merged with ConAgra. Fiscal 1999 nine month diluted earnings per share were $1.05, up 5% from $1.00 reported a year ago, and up 6% from 99 cents as restated.

The fiscal 1998 figures above exclude a third quarter one-time, non-cash provision of 3 cents per share for a required accounting change. Including the provision, fiscal 1998 diluted earnings per share for the third quarter were 27 cents as reported and 25 cents restated, and for the nine months 97 cents as reported and 96 cents restated.

ConAgra's chairman and chief executive officer, Bruce Rohde, commented, “We're pleased to see ConAgra's earnings improve in the third quarter. As expected, our Refrigerated Foods business segment is driving earnings growth this year. For the full year, we expect to achieve earnings growth and a better balanced platform for future profit growth.”

In the following review of fiscal 1999 third quarter and nine month results, comparisons are with fiscal 1998 third quarter and nine month results restated for pooling of interests unless otherwise indicated.

In ConAgra's Refrigerated Foods business segment, fiscal 1999 third quarter operating profit was up 18-fold, or 1,700%, versus depressed results in fiscal 1998's third quarter, and up 48% from more representative results in fiscal 1997's third quarter. Fiscal 1999 nine month segment operating profit increased 56% versus fiscal 1998's first nine months, and 10% versus fiscal 1997's first nine months. Segment sales increased 8% in the third quarter and 4% through nine months despite the negative effect of lower pork and beef raw materials prices passed through as lower selling prices.

The Refrigerated Foods segment's five businesses all increased fiscal 1999 third quarter and nine month operating profit versus the same periods in fiscal 1998. Significant unit volume growth supported branded packaged meats' operating profit growth. An acquisition contributed to strong operating profit growth in the cheese and tablespreads business. The beef, pork and poultry businesses rebounded from last year's results, severely depressed by excess industry production and reduced Asian export demand.

In ConAgra's Grocery & Diversified Products business segment, operating profit was up 3% in the third quarter and 4% in the first nine months of fiscal 1999 versus the same periods in fiscal 1998. Segment sales increased 7% in fiscal 1999's third quarter and 9% in fiscal 1999's first nine months before fiscal 1998 restatement. On a restated basis, sales increased 1% in both periods.

ConAgra frozen prepared foods boosted unit volumes and increased third quarter and nine month operating profit significantly, led by the Gilardi Foods and Pierce Foods businesses. The Lamb-Weston potato products business nearly equaled last year's strong third quarter operating profit and was ahead through nine months. In shelf-stable foods, operating profit decreased slightly in both periods.

In ConAgra's Food Inputs & Ingredients business segment, operating profit was down 9% in the third quarter and 5% in the first nine months of fiscal 1999 versus the same periods in fiscal 1998. Segment sales decreased 4% in the third quarter and 2% through nine months. Business dispositions, lower commodity selling prices and sales reclassification reduced segment sales over 3% in both periods.

ConAgra's major crop inputs business, United Agri Products, increased operating profit substantially in fiscal 1999's third quarter and first nine months. In the ingredients sector, third quarter and nine month operating profit growth in international operations was more than offset by a decline in commodity trading and grain processing in both periods.

For ConAgra in total, before the accounting change last year, fiscal 1999 third quarter net income increased 28% to $171.4 from $133.7 million, and nine month net income increased 6.5% to $499.7 million from $469.2 million. Including a provision of $14.8 million after tax for the accounting change for business systems reengineering costs, fiscal 1998 third quarter net income was $118.9 million, and nine month net income was $454.4 million.

Fiscal 1999 third quarter net sales were $5.69 billion, up 4% from $5.47 billion in fiscal 1998's restated third quarter, and up 6% from $5.38 billion before restatement. Fiscal 1999 nine month net sales were $18.58 billion, up 2% from $18.28 billion in fiscal 1998's restated first nine months, and up 3% from $17.96 billion before restatement. Adjusted for business dispositions, acquisitions and lower commodity selling prices, fiscal 1999 nine month sales increased 4% versus fiscal 1998's restated nine month sales, and 6% versus fiscal 1998's nine month sales before restatement. Comparable adjustments had less effect on third quarter sales comparisons.

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