ConAgra 4th-quarter net income falls on charges, lower sales

ConAgra 4th-quarter net income drops

PORTLAND, Ore. — ConAgra Foods Inc. reported Thursday that its fourth-quarter net income fell 48 percent, dragged down by charges, a poor potato crop and an extra week in last year’s fourth quarter.

The company also forecast earnings for its current fiscal year at the low end of analyst expectations. Shares of ConAgra, based in Omaha, fell in midday trading.

ConAgra, which makes Banquet, Chef Boyardee, Peter Pan and other brands, reported that it earned $90.6 million, or 20 cents per share, for the quarter. That’s down from $174.7 million, or 39 cents per share in the same quarter last year. Excluding one-time items, it earned 39 cents per share.

Revenue fell 5 percent to $3.06 billion.

The results were just shy of Wall Street’s expectations. Analysts polled by Thomson Reuters anticipated the company would earn 40 cents per share on revenue of $3.18 billion. Analyst estimates typically exclude one-time items.

ConAgra has benefited from consumers continuing to eat at home more often but continues to feel the pinch in its commercial foods business, which supplies food to restaurants and other institutional clients.

The consumer foods division, which produces about two-thirds of ConAgra’s revenue, saw revenue fall 4 percent to $2.03 billion. But adjusted for the extra week in the previous year’s fourth quarter, sales increased 3 percent.

Revenue in its commercial foods segment fell 6 percent to $1.03 billion. The segment has struggled for some time from the weakness in the restaurant industry and took a major blow this quarter from a poor potato crop that hiked costs for ConAgra’s Lamb Weston frozen potato unit.

For the year, ConAgra’s net income fell 26 percent to $725.8 million, or $1.62 per share, from $978.4 million, or $2.15 per share last year. Revenue fell 3 percent to $12.08 billion.

ConAgra’s management remained upbeat about the most recent fiscal year, despite the mixed results for the fourth quarter. The company said it will focus on continued cost control, product innovation and recently announced additions — such as the acquisition of American Pie, which expands its business with Marie Callendar’s Pie Shops Inc. — to help drive business.

ConAgra predicts its net income will rise 8 percent to 10 percent in 2011, with the bulk of the growth in the second half of the year when it expects potato costs to come down. That implies $1.88 to $1.91 per share; analysts were anticipating a profit of $1.91 per share.

Shares of the company fell 30 cents to $24.39 in midday trading Thursday.

AP Business Writer Mae Anderson contributed to this report from New York.