Omaha, NB - ConAgra, Inc. reported results for fiscal year 1999's first quarter ended August 30, 1998.
Fiscal 1999 first quarter diluted earnings per share were 23 cents, down 4% from 24 cents in fiscal 1998's first quarter as reported a year ago, and down 8% from 25 cents in fiscal 1998's first quarter as restated for pooling of interests with four businesses that subsequently merged with ConAgra.
Commenting on the first quarter outcome, Bruce Rohde, ConAgra's president and chief executive officer, said, "Most ConAgra businesses continued to perform well as indicated by double-digit operating profit growth in our Grocery & Diversified Products and Food Inputs & Ingredients segments. Although our third business segment, Refrigerated Foods, weighed on ConAgra's first quarter results, we see light at the end of the tunnel in fresh meat and poultry where excess industry production has pressured selling prices and margins for many months. Strengthened leadership is making a positive difference and the protein glut is expected to ease later in our fiscal year."
In ConAgra's Grocery & Diversified Products business segment, operating profit increased 10% and sales increased 1% in fiscal 1999's first quarter versus fiscal 1998's first quarter. Compared with fiscal 1998's first quarter as reported a year ago, operating profit increased 18% and sales increased 11%.
The segment's three business groups all contributed to first quarter operating profit growth. ConAgra Frozen Foods increased unit volumes and boosted operating profit significantly. ConAgra Foodservice Sales Company, which includes Lamb-Weston potato products, also registered significant operating profit growth. ConAgra Grocery Products, the shelf-stable foods group, raised operating profit supported by Hunt-Wesson's, Golden Valley's and GoodMark's strong unit volume growth.
In ConAgra's Food Inputs & Ingredients business segment, operating profit increased 13% and sales increased 11% in fiscal 1999's first quarter versus fiscal 1998's first quarter.
ConAgra's major crop inputs business, United Agri Products, enjoyed substantial sales and operating profit growth in fiscal 1999's first quarter. In the ingredients sector, commodity services, international operations and specialty food ingredients achieved operating profit growth, while operating profit was down in grain merchandising and flour milling.
In ConAgra's Refrigerated Foods business segment, operating profit decreased 29% and sales were unchanged in fiscal 1999's first quarter versus fiscal 1998's first quarter. Lower pork and beef raw materials prices passed through as lower selling prices constrained segment sales about 4%.
The branded packaged meats business increased first quarter unit volumes and operating profit. A recent acquisition contributed to operating profit growth in the cheese and tablespreads business.
Poultry products and Australia beef raised operating profit significantly. Pork operating profit was down due to the effect of procurement contracts while raw materials prices were low. The principal cause of the segment's operating profit decline was a sharp drop in U.S. beef processing as excess total protein supply weighed heavily on beef industry prices and margins.
For ConAgra in total, fiscal 1999 first quarter net income was $109.3 million, down 8% from $118.3 million in fiscal 1998's restated first quarter, and down 1% from $110.1 million before restatement. Fiscal 1999 first quarter net sales were $6.48 billion, up 3.5% from $6.26 billion in fiscal 1998's restated first quarter, and up 5.5% from $6.14 billion before restatement.
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