NEW YORK (TheStreet) -- Shares of ConAgra Foods (CAG - Get Report) are down by 0.54% to $40.29 at the start of trading on Thursday morning, after the food producer announced that it will cut 1,500 jobs as part of a $300 million restructuring plan.
The Omaha, NE-based company also announced that it is moving its headquarters to Chicago from its current home, with 700 employees working out of the new headquarters by next summer.
The company will still maintain a hub in Nebraska with about 1,200 employees employed in the city, less than half of the current 3,000 employees.
ConAgra will incur charges of about $345 million over the next two or three years due to the restructuring plan, the company said.
Savings from the plan will be fully realized by 2018, ConAgra added.
Separately, TheStreet Ratings team rates CONAGRA FOODS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate CONAGRA FOODS INC (CAG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- CONAGRA FOODS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CONAGRA FOODS INC swung to a loss, reporting -$1.46 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus -$1.46).
- CAG, with its decline in revenue, underperformed when compared the industry average of 9.0%. Since the same quarter one year prior, revenues fell by 24.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food Products industry and the overall market, CONAGRA FOODS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food Products industry. The net income has significantly decreased by 357.4% when compared to the same quarter one year ago, falling from $482.30 million to -$1,241.40 million.
- You can view the full analysis from the report here: CAG