010644 ConAgra Foods Restates EarningsJune 26, 2001Omaha, NE - ConAgra Foods Inc. warned that its fiscal fourth-quarter earnings will be sharply lower than analysts' expectations and also announced that it was restating its earnings for the last three years. A month ago, the food giant said that fictitious sales and misreported earnings in one of its subsidiaries would result in lower earnings for its last three fiscal years totaling about $120 million. The company and the U.S. Securities and Exchange Commission said they were continuing an informal investigation of problems at the subsidiary, United Agri Products Cos. With sales of about $27 billion a year, ConAgra is the nation's largest food service manufacturer and second largest retail food supplier. It owns companies across the food chain, and its major brand names include Healthy Choice, Hunt's tomato products, Banquet meals and Armour meats. The company cited a softening economy, high energy prices, changing inventory levels among retailers and increased marketing investment for the expected shortfall in its fourth-quarter earnings. ConAgra said now expects diluted earnings per share of 19 cents to 23 cents. Analysts surveyed by Thomson Financial/First Call expected the company to earn 35 cents a share. The company's stock fell 46 cents to $20.53 Friday on the New York Stock Exchange. The company, however, expects that in fiscal 2002 it will show strong gains, possibly even double-digit growth. “While some of the factors that made for a difficult 2001 will continue into our new fiscal year, we think the economy will snap back at some point,” said Bruce Rohde, chairman and chief executive officer. ConAgra's audit committee began investigating in November the accounting at United Agri Products, the agricultural subsidiary distributes seed, fertilizer and farm chemicals. It accounts for about 9% of ConAgra's business. The restated earnings are: - Fiscal 1998, revenues will be reduced by about $42 million; profits before taxes will be reduced by $16 million; and earnings per share will be reduced by 2 cents. - Fiscal 1999 revenues will be reduced by about $84 million; profits before taxes by about $47 million; and earnings per share will be reduced from by 6 cents. - Fiscal 2000 revenues will be reduced by $161 million; profits before taxes will be reduced by $48 million; and earnings per share will be reduced by 6 cents. The company also restated its fiscal 1997 retained earnings by $7 million to reflect the net income effect of reducing revenues by $38 million, income before taxes by $12 million and diluted earnings per share by 1 cent. ConAgra also filed a restatement for the first three quarters of 2001. Total revenues increased $324 million, income before taxes increased $28 million, and earnings per share increased 4 cents.
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