ConAgra (CAG) Q2 Net Income Lower as Bad Potato Crop Hampered Consumer Foods

December 21, 2010 9:52 AM EST
ConAgra (NYSE: CAG) shares are in the green today, up about 0.3% in early trading, following the company's second quarter earnings release this morning.

ConAgra reported net income of $298 million, or $0.45 per share, a 14% drop from $346 million reported for the same period in Q210.

Revenues in the quarter were $3.16 billion, slightly stronger than the $3.10 billion reported for the same period last year.

Overall, the Street was looking for an EPS of $0.45 with $3.13 billion in revs.

Conditions that CEO Gary Rodkin said impacted their results included, "Difficult market conditions, weaker-than-planned consumer response to promotions, and higher-than-planned inflation."

The company reports that consumer foods sales, while higher, were impacted by the higher cost of processing an unusually 'poor-quality' crop.

ConAgra reiterated their FY11 outlook. Commenting on the outlook, CEO Rodkin said, "Very importantly, we are increasing net pricing on a number of our products given the ongoing acceleration of cost inflation...Price increases, along with strong cost savings, lower SG&A, accelerating contribution from innovation and recently acquired businesses, and a good-quality potato crop currently being processed are expected to drive improved year-over-year earnings for the rest of the fiscal year."

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