ConAgra follow-up: CAG guides below consensus; cites weakness in Consumer Foods segment, as well as weak profits for the Private Brands segment
Co issues downside guidance for Q4 (May), sees EPS of $0.55 vs. $0.62 Capital IQ Consensus Estimate.
- The lower-than-planned comparable EPS is largely the result of a 7% quarterly volume decline for the Consumer Foods segment, as well as weak profits for the Private Brands segment.
- "Given the challenges we faced in fiscal 2014 with regard to Consumer Foods volumes and Private Brands profitability, we are in the process of gradually strengthening several areas of our company.
- We anticipate fiscal 2015 to be a year of stabilization and recovery that delivers mid-single-digit comparable EPS growth.
- Comparable EPS growth in fiscal 2016 and 2017 should accelerate to a high-single-digit rate as we benefit from stronger underlying operations, generate sizeable productivity and administrative savings, and continue to realize substantial synergies from the Ralcorp transaction.
- Administrative savings are expected to play a growing role in future EPS performance as we implement effectiveness and efficiency initiatives resulting from significant work over the past fiscal year.
- Throughout this period of anticipated stabilization, recovery, and eventual acceleration of EPS performance, we expect to have the flexibility to invest in our business for good long-term growth.
- We plan to continue our current $1.00 per share annual dividend payment, and remain committed to a strong dividend policy in the future."