What to Expect When ConAgra Foods (CAG) Reports Its Earnings Results

NEW YORK (TheStreet) -- ConAgra Foods Inc. (CAG) is scheduled to release its fiscal 2015 second quarter earnings results before the market open on Thursday. Analysts are expecting the food company's earnings and revenue to decline year over year.

Shares of ConAgra Foods are higher by 0.41% to $36.70 in mid-morning trading on Wednesday.

For the most recent quarter ConAgra Foods, whose brands include Reddi Wip, Swiss Miss. Healthy Choice, and Orville Redenbacher's, is expected to earn 61 cents per share, on revenue of $4.20 billion.

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For the fiscal 2014 second quarter ConAgra Foods posted adjusted earnings of 62 cents per share, on revenue of $4.71 billion.

Separately, TheStreet Ratings team rates CONAGRA FOODS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate CONAGRA FOODS INC (CAG) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 234.2% when compared to the same quarter one year prior, rising from $144.30 million to $482.30 million.
  • Net operating cash flow has increased to $233.60 million or 40.63% when compared to the same quarter last year. In addition, CONAGRA FOODS INC has also modestly surpassed the industry average cash flow growth rate of 34.07%.
  • CONAGRA FOODS INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, CONAGRA FOODS INC reported lower earnings of $0.65 versus $1.87 in the prior year. This year, the market expects an improvement in earnings ($2.27 versus $0.65).
  • CAG, with its decline in revenue, slightly underperformed the industry average of 2.0%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: CAG Ratings Report

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