Conagra Brands, Inc. (CAG) has reported a 21.17 percent fall in profit for the quarter ended Nov. 27, 2016. The company has earned $122.10 million, or $0.28 a share in the quarter, compared with $154.90 million, or $0.35 a share for the same period last year.
Revenue during the quarter dropped 11.46 percent to $2,088.40 million from $2,358.80 million in the previous year period. Gross margin for the quarter expanded 269 basis points over the previous year period to 31 percent. Total expenses were 89.01 percent of quarterly revenues, down from 92.17 percent for the same period last year. This has led to an improvement of 316 basis points in operating margin to 10.99 percent.
Operating income for the quarter was $229.60 million, compared with $184.80 million in the previous year period.
Sean Connolly, president and chief executive officer of Conagra Brands, commented, "We are successfully reshaping our portfolio, capabilities, and culture. Our increased focus and discipline on driving value over volume are enabling us to expand our margins as we build a higher-quality revenue base, improve efficiency, and deliver stronger, more consistent performance."
For financial year 2017, Conagra Foods forecasts revenue to grow in the range of 4 percent to 5 percent for the fiscal year 2017. The company forecasts adjusted operating income to grow in the range of 15.30 percent to 15.50 percent. The company expects diluted earnings per share to be in the range of $1.65 to $1.70.
Operating cash flow improves significantly
Conagra Brands, Inc. has generated cash of $542.20 million from operating activities during the first half, up 53.99 percent or $190.10 million, when compared with the last year period.
Cash flow from investing activities was $150.20 million for the first half as against cash outgo of $237 million in the last year period. It has incurred net capital expenditure of $215.20 million on net basis during the first six months, up 106.33 percent or $110.90 million from year ago period.
The company has spent $80.90 million cash to carry out financing activities during the first six months as against cash outgo of $166.80 million in the last year period.
Cash and cash equivalents stood at $1,442.50 million as on Nov. 27, 2016, up 1,903.47 percent or $1,370.50 million from $72 million on Nov. 29, 2015.
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