010703 ConAgra Foods Reverses 4th-Quarter Loss

Omaha, NE - ConAgra Inc. reversed a fourth-quarter loss, but fell short of original profit estimates, blaming high energy costs and a softening economy.

The huge food company said Thursday that it earned $121.4 million, or 23 cents per share, for the quarter ended May 27, compared with a loss of $43.8 million, or 9 cents per share, a year ago.

The year-ago results were dragged down by part of a 13-month, $1 billion restructuring plan that cut 6,700 jobs and closed 15 plants.

Sales during the last quarter increased 4.7% to $6.4 billion from $6.1 billion in the year-earlier quarter.

ConAgra warned last week that its quarterly earnings would be sharply lower than analysts' expectations because of weak economic conditions, high energy prices, changing inventory levels among retailers and increased marketing investments.

Company officials said profits would be 19 cents to 23 cents per share. Analysts previously surveyed by Thomson Financial/First Call had expected the company to earn 35 cents per share.

“We a faced a difficult business environment in the last half of fiscal 2001,” said Bruce Rohde, chairman and chief executive officer. “Barring any unforeseen economic setbacks, we expect to see marked improvement.”

For the past fiscal year, ConAgra reported earnings growth of 67% per share, much higher than its benchmark annual earnings growth of 15% over the past two decades.

The jump, however, was somewhat misleading. ConAgra's fiscal 2000 earnings were significantly lower because of restructuring charges and accounting corrections. Fiscal 2000 earnings recently were corrected after an audit discovered fictitious sales and misreported earnings by subsidiary, United Agri Products Cos.

ConAgra and the Securities and Exchange Commission are investigating the accounting problems at United Agri Products. The subsidiary, which distributes seed, fertilizer and farm chemicals, accounts for 9% of ConAgra's business.

ConAgra said that net income for the year ended May 27 was $638.6 million, or $1.24 per share, up from $382.3 million, or 80 cents per share, in fiscal 2000.

Sales increased 6.5% from $25.5 billion in fiscal 2000 to $27.2 billion in the last year.

ConAgra is the nation's largest food service manufacturer and second largest retail food supplier. Its brand names include Healthy Choice, Hunt's tomato products, Banquet meals and Armour meats.

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