ConAgra Foods Raises Dividend

Oct. 1.09 | About: ConAgra Foods, (CAG)

Last week, ConAgra Foods Inc. (NYSE:CAG) raised its regular quarterly dividend by a 1 cent to 20 cents based on encouraging results for the first quarter of fiscal year 2010. The company has decided to pay the dividend on Dec. 1 to shareholders of record Oct. 30.

During the quarter, earnings excluding one-time items were 38 cents compared to 27 cents in the year-ago quarter. This was the above Zacks Consensus Estimate of 33 cents. Total revenue was $2,961 million from $3,052 million in the year-ago quarter.

The Consumer Foods segment posted sales of $1,860 million, up 1% year over year. Operating profit came to $250 million, up from $186 million in the last-year quarter. This segment accounted for 63% of total revenue in the first quarter.

Sales in the Commercial Foods segment were $1,101 million, down 9% from the first quarter of fiscal year 2009. The sales decline was the result of lower flour prices resulting from lower underlying wheat costs. Segment operating profit was $141 million, 5% above the same period in fiscal 2009. The segment was responsible for the remaining 37% of total revenue.

For the quarter, capital expenditure from continuing operations for property, plant and equipment was $119 million, compared with $106 million in the year-ago period. Depreciation and amortization expense from continuing operations was approximately $82 million for the quarter compared to a total of $76 million in the year-ago period.

During the quarter, ConAgra announced plans to build a state-of-the-art sweet potato processing plant in Delhi, Louisiana, which is expected to be fully operational by the end of calendar 2010. Management believes that the plant will significantly expand its presence in the sweet potato fries market and enable additional significant sales and profit growth opportunities for the Lamb Weston specialty potato operations over time.

ConAgra expects fiscal 2010 full-year diluted EPS from continuing operations, excluding items impacting comparability, to approach $1.70, based on the expectations for continued progress in the consumer foods segment throughout the remainder of the fiscal year.