Packaged food producer ConAgra Brands Inc. (CAG) reported Thursday higher net profit in its fourth quarter with margin strength. Net sales, meanwhile, declined from last year on weak volume. Looking ahead, for fiscal 2018, the company projects higher adjusted earnings and lower to flat sales. The company also reiterated its three-year fiscal 2020 financial algorithm.
Further, the company announced that its Board of Directors has approved an additional $1 billion share repurchase authorization. The Company’s total share repurchase authorization as is approximately $1.38 billion.
In the fourth quarter, net income attributable to the company climbed 28.7 percent to $151.3 million from $117.6 million last year. Earnings per share were $0.36, up 33.3 percent from $0.27 a year ago.
The prior year’s results included a significant $237.5 million income from discontinued operations. On a continuing operations basis, the earnings were $153.6 million or $0.36 per share, compared to last year’s loss of $116.6 million or $0.27 per share.
Adjusted earnings per share from continuing operations were $0.37, compared to $0.32 last year.
On average, 13 analysts polled by Thomson Reuters expected earnings of $0.37 per share for the quarter. Analysts’ estimates typically exclude special items.
The company noted that lower expenses benefited the results, partially offset by volume declines and the impact of the divestitures of the Spicetec Flavors & Seasonings and JM Swank businesses.
Gross margin increased 10 basis points to 28.4 percent, and adjusted gross margin increased 130 basis points to 29.0 percent.
Net sales decreased 9.3 percent to $1.87 billion from $2.05 billion a year ago. Analysts were looking for sales of $1.86 billion. Net sales excluding the impacts of divestitures and foreign exchange decreased 3.6 percent.
The weak sales primarily reflected volume declines associated with the Company’s actions to build a higher quality revenue base.
Looking ahead, for fiscal 2018, the company expects adjusted earnings per share from continuing operations in the range of $1.84 to $1.89. Analysts expect earnings of $1.88 per share for the year. In the year 2017, adjusted earnings per share from continuing operations were $1.74.
ConAgra expects reported net sales and organic net sales would be down 2 percent to flat in 2018. Adjusted operating margin is projected in the range of 15.9 percent to 16.3 percent. The fiscal 2018 outlook includes the expected results of the Wesson oil…