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OMAHA, Neb. -- Anemic profits from its packaged meat business dragged earnings at ConAgra Foods Inc., based here, down 40 percent, the giant food processor said yesterday.
Net income drooped to $101.9 million, or 20 cents per share, from $169.3 million, or 32 cents in the same quarter a year ago. The performance missed analysts projections by 6 cents. The latest quarter included charges of 6 cents per share related to severance costs and a change in estimated state income tax rates.
In its Retail Products business segment, which makes up 60 percent of ConAgra's annual volume, sales were down 6 percent, to $2.1 billion. Operating profit in that segment dropped about 24 percent, to $243 million, from $319 million in the fourth quarter last year. Packaged meats were a prominent factor in the slide, with a 12 percent drop in earnings.
"It was purely our execution," Bruce Rohde, ConAgra's president, chief executive and chairman, said in a conference call with analysts. "We had about $180 million in input increases higher than we expected and longer than we expected, and we did not execute well in the marketplace."
Sales overall fell 4 percent, to $3.71 billion, from $3.84 billion. Excluding an extra week in the year ago quarter, sales would have been up 4 percent in the latest period.
ConAgra said it will pair back SKUs across brands, to help stem the tide of shrinking profits.