On September 20, ConAgra Foods, the American packaged food group, reported record first quarter sales and earnings for the period ending August 26, 2001.
Q1 earnings were $.36 per diluted share, representing 44 per cent growth over earnings of $.25 per diluted share in the first quarter of fiscal 2001. Sales increased 8 per cent to reach $7.6bn (Euro8.194bn) and operating profit improved 20 per cent to $528m (Euro569.3m). The company's overall performance reflects strong food volume growth, a larger portfolio of value-added products due to the acquisition of several food brands late in the first quarter of fiscal 2001, and more favourable market conditions for some business units.
Bruce Rohde, chairman and chief executive officer, commented, "While our team is pleased with the quarter's performance and confident that we will reach the goals we set for ourselves this fiscal year, our sympathies are with those who have been affected by the horrible and tragic events that took place in New York and Washington DC on September 11. Our thoughts and prayers are with families and colleagues of the victims as well as the rescue workers and other authorities who continue to work heroically in these extremely difficult circumstances. At the suggestion of our country's president, our team has approached work this week with a new determination and fresh vigour to help keep America strong."
Results for the first quarter of fiscal 2001 included a $.09 charge per diluted share from the cumulative effect of changes in accounting principles; excluding this charge, earnings for the first quarter of fiscal 2002 increased 6 per cent.
The company's food business (Packaged Foods and Refrigerated Foods reporting segments) showed substantial growth in sales and profits. Sales grew 11 per cent to reach $5.6bn (Euro6.038bn) and operating profit improved 30 per cent to reach $407m (Euro438.8m).
Sales for the company's Packaged Foods segment grew 32 per cent to reach $2.2bn (Euro2.372bn) and operating profit improved 31 per cent to reach $265m (Euro285.74m). Sales and profit growth reflect the acquisition of several branded food products late in the first quarter of fiscal 2001 as well as improving trends for several of the company's large brands.
While gains were achieved in many product groupings sold to retail consumers, recent economic factors negatively impacted the foodservice-focused business unit, which includes such products as French fries, specialty meats, seafood, and tortillas, during the quarter. Compared to its overall performance over the last several quarters, the foodservice-focused products generated a slower rate of sales and profit growth.
Sales for the Refrigerated Foods segment grew 1 per cent to $3.5bn (Euro3.773bn) and operating profit increased 29 per cent to $142m (Euro153.11m). Despite higher input costs, the company's branded processed meats business posted solid profit growth.
The company's fresh pork business showed sales and profit gains due to more favourable marketplace conditions. The company's poultry operations showed significantly increased profitability due to a better market environment for poultry products as well as operating improvements resulting from targeted efficiency projects. The company's fresh beef operations showed levels of profitability that were strong due to similar targeted efficiency projects, but below last year's levels due to less favourable marketplace dynamics during the quarter.
Sales for the company's Agricultural Products segment remain unchanged at $2bn (Euro2.156bn), while operating profit declined 4 per cent to $121m (Euro130.472m). Profit trends for United Agri Products, the distributor of crop inputs and agricultural information services, showed improvement compared to those experienced in the second half of fiscal 2001, but were below the comparable quarter last fiscal year due to continuing difficult agricultural conditions.
Profits for this business unit were negatively impacted in the quarter due to relatively weaker demand, a difficult pricing environment, and increased bad debts. Profits for the ConAgra Trade Group were slightly below those of the comparable quarter last year, while profits for ConAgra Food Ingredients, which includes milling and spice businesses, increased.
Bruce Rohde commented, "We are off to a good start for fiscal 2002, and remain slightly ahead of our original expectations for the year. Product, marketing, and operational investments made in prior periods, as well as more favourable operating environments for some of our businesses, are positively impacting our profits. Our team continues to strive for excellence in terms of optimally coordinating our sales, marketing, and manufacturing functions, which is key to our becoming the most efficient producer of quality and innovative consumer-driven items."