Omaha, Neb - ConAgra, Inc. reported record earnings for fiscal year 1998's second quarter and first half ended November 23, 1997.
In fiscal 1998's second quarter, earnings per share rose 12.7 percent to 46.0 cents from 40.8 cents in last year's second quarter, and net income increased 12.4 percent to $210.6 million from $187.4 million. In fiscal 1998's first half, earnings per share rose 13.3 percent to 70.0 cents from 61.8 cents a year ago, and net income increased 13.2 percent to $320.8 million from $283.4 million. Earnings per share figures reflect ConAgra's two-for-one common stock split in October 1997.
ConAgra's president and chief executive officer, Bruce Rohde, commented, "ConAgra's business balance and continued long-term margin improvement drove healthy bottom line results. Adjusted for business dispositions and commodity price levels, our top line grew modestly. Increasing profitable top line growth via internal initiatives and acquisitions is a fundamental priority in our strategic planning."
Mr. Rohde said, "In the second half of our fiscal year, we believe many of our businesses will perform well, while some have yet to prove their potential. Nevertheless, with a good first half behind us, we continue to expect double-digit earnings per share growth for the full year."
In ConAgra's Grocery & Diversified Products industry segment, operating profit was up 9 percent in the second quarter and 6 percent in the first half of fiscal 1998 versus the same periods in fiscal 1997. Segment sales increased 1 percent in the second quarter and 2 percent in the first half. Segment results topped exceptionally strong results last year when operating profit increased over 25 percent in the second quarter and first half, and sales grew at a double-digit pace in both periods.
ConAgra Frozen Foods achieved strong operating profit growth in fiscal 1998's second quarter and first half. Unit volume growth helped shelf-stable foods -- the Hunt-Wesson companies and Golden Valley -- increase second quarter operating earnings. In the first half, Golden Valley increased earnings significantly, while Hunt-Wesson's earnings dropped slightly due to heavy first quarter spending to introduce several lines of new products. The Lamb-Weston potato products business and the seafood business both boosted second quarter and first half earnings.
In ConAgra's Food Inputs & Ingredients industry segment, operating profit grew 9 percent in the second quarter and 20 percent in the first half of fiscal 1998 versus the same periods in fiscal 1997. Segment sales decreased 3 percent in the second quarter and were down less than 1 percent in the first half. Adjusted for a fiscal 1998 first quarter business divestiture and lower commodity price levels this year, segment sales were up over 5 percent in both periods.
ConAgra's major crop inputs business, United Agri Products, enjoyed significant sales growth and strong operating profit growth in fiscal 1998's second quarter and first half. Commodity services, flour milling and specialty food ingredients contributed meaningfully to segment operating profit growth in both periods. Earnings declined in grain merchandising and a number of other ingredients businesses.
In ConAgra's Refrigerated Foods industry segment, operating profit decreased 6 percent in the second quarter and 7 percent in the first half of fiscal 1998 versus the same periods in fiscal 1997. Segment sales decreased 3 percent in both periods. Adjusted for business dispositions and lower commodity selling price levels, sales were up nearly 3 percent in the second quarter and about 1 percent in the first half.
The branded processed meats businesses improved margins meaningfully and increased earnings in the second quarter and first half. Earnings rose in the Australia beef business in both periods and declined in the U.S. beef business in both periods. Second quarter and first half earnings were down in the pork, poultry and cheese businesses. Although the Refrigerated Foods segment performed below expectations in fiscal 1998's first half, it has the potential to achieve significantly better second half results.
For ConAgra in total, fiscal 1998 second quarter sales decreased 2 percent to $6.43 billion from $6.59 billion. First half sales decreased 1 percent to $12.57 billion from $12.75 billion. Adjusted for business dispositions and lower commodity selling prices, second quarter and first half sales increased nearly 3 percent.
ConAgra's effective tax rates were 38.8 percent in fiscal 1998's second quarter and 39.0 percent in fiscal 1998's first half versus 40.8 percent in both periods last year and 39.6 percent for the full fiscal year 1997.
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