Earnings Review and Free Research Report: Conagra’s Q4 Adjusted EPS surged 15.6%; Beat Estimates

LONDON, UK / ACCESSWIRE / July 12, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Conagra Brands, Inc. (NYSE: CAG), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=CAG, following the Company’s posting of its fourth quarter fiscal 2017 (Q4 FY17) and full year 2017 (FY17) on June 29, 2017. The Chicago, Illinois-based Company’s diluted EPS from continuing operations grew 15.6% y-o-y; meeting market expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

For the three months ended on May 28, 2017, Conagra reported net sales of $1.86 billion, which came in 9.3% below $2.05 billion recorded at the end of Q4 FY16. Net sales numbers for the reported quarter met market expectations.

The packaged food maker reported income from continuing operations of $153.6 million, or $0.36 per diluted share, in Q4 FY17 against loss from continuing operations of $116.6 million, or $0.27 loss per diluted share, in Q4 FY16. The Company’s adjusted EPS from continuing operations for Q4 FY17 came in at $0.37 per diluted share compared to $0.32 per diluted share reported in the prior year’s same period. Meanwhile, Wall Street had also expected the Company to report adjusted EPS from continuing operations of $0.37 per diluted share.

Conagra’s net sales for full year FY17 stood at $3.21 billion versus $3.38 billion a year ago. The Company’s income from continuing operations surged during FY17 to $546.0 million, or $1.26 per diluted share, from $128.5 million, or $0.29 per diluted share, in FY16. Furthermore, the Company’s adjusted EPS from continuing operations rose 33.8% during FY17 to $1.74 per diluted share from $1.30 per diluted share in FY16.

Operating Metrics

In Q4 FY17, adjusted gross profit margin was $540.5 million, or 29.0% of net sales, compared to $569.3 million, or 27.7% of net sales, in Q4 FY16. During the reported quarter, Conagra spent $417.8 million on selling, general, and administrative expenses, much below $731.6 million in Q4 FY16. Furthermore, total segment’s operating profit stood at $170.4 million in Q4 FY17 compared to $260.0 million in Q4 FY16.

Segment Performance

During Q4 FY17, Grocery & Snacks segment’s net sales came in at $749.4 million, down 3.0% from $772.5 million in the year-ago same period. The segment’s adjusted operating profit margin was also down to $159.3 million in Q4 FY17 from $168.3 million in Q4 FY16.

Conagra’s Refrigerated & Frozen segment’s net sales were $640.2 million in Q4 FY17, which was 5.1% lower than the last year’s recorded net sales numbers of $674.5 million. Meanwhile, the segment’s adjusted operating profit improved to $107.0 million in Q4 FY17, from $104.8 million in Q4 FY16.

The International segment contributed $204.7 million to the Company’s total sales in Q4 FY17 compared to $207.3 million in Q4 FY16. Moreover, the segment’s adjusted operating profit for Q4 FY17 came in at $17.9 million, up from $13.5 million in Q4 FY16.

The Company’s Foodservice segment reported sales of $267.4 million in Q4 FY17, falling 5.3% from $282.3 million in Q4 FY16. In the reported quarter, the segment’s operating was $23.7 million, compared to $23.2 million in Q4 FY16.

Cash Flow & Balance Sheet

In the year ended May 28, 2017, Conagra generated $1.14 billion as net cash from operations of continuing operations compared to $625.5 million in the year ago corresponding period. The Company had cash and cash equivalents balance of $251.4 million as on May 28, 2017, compared to $798.1 million, at the close of books on May 29, 2016. Furthermore, the Company ended the quarter with senior long-term debt of $2.57 billion compared to $4.69 billion as on May 29, 2016.

Share Repurchase

During Q4 FY17, the Company reached its FY17 share repurchase target of $1 billion of common stock. Furthermore, Conagra’s Board of Directors has authorized an additional $1 billion of share repurchases.

Outlook

In its guidance for full year FY18, the Company forecasts net sales growth to be in the range of (2)% to flat. Adjusted operating margin for FY18 is expected to be slightly above the range of 15.9% to 16.3%. Furthermore, adjusted diluted EPS at the end of next fiscal year is forecasted to be between $1.84 to $1.89.

Stock Performance

At the close of trading session on Tuesday, July 11, 2017, Conagra Brands’ stock price marginally fell 0.48% to end the day at $33.07. A total volume of 7.87 million shares was exchanged during the session, which was above the 3-month average volume of 3.65 million shares. The Company’s shares are trading at a PE ratio of 26.82 and have a dividend yield of 2.42%. At Tuesday’s closing price, the stock’s net capitalization stands at $14.39 billion.

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