The 10-second takeaway
For the quarter ended Nov. 27 (Q2), ConAgra Foods beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded, and earnings per share dropped.
Margins contracted across the board.
ConAgra Foods tallied revenue of $3.4 billion. The 12 analysts polled by S&P Capital IQ foresaw revenue of $3.3 billion. Sales were 7.7% higher than the prior-year quarter's $3.2 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.47. The 15 earnings estimates compiled by S&P Capital IQ anticipated $0.43 per share on the same basis. GAAP EPS of $0.41 for Q2 were 9.2% lower than the prior-year quarter's $0.45 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 22.2%, 200 basis points worse than the prior-year quarter. Operating margin was 8.9%, 170 basis points worse than the prior-year quarter. Net margin was 5%, 140 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $3.4 billion. On the bottom line, the average EPS estimate is $0.52. (There are 11 revenue estimates and 15 EPS estimates.)
For the full year ending 2012, the average estimate for revenue is $13.2 billion. The average EPS estimate is $1.81. (There are 14 revenue estimates and 16 EPS estimates.)
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 605 members out of 672 rating the stock outperform, and 67 members rating it underperform. Among 214 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 202 give ConAgra Foods a green thumbs-up, and 12 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ConAgra Foods is outperform, with an average price target of $25.73.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.