Earnings Preview: What to expect when Conagra reports Q4 2019 results

Conagra Brands Inc. (NYSE: CAG) is scheduled to report fourth quarter 2019 earnings results on Thursday, June 27, before market open. Wall Street anticipates the company will deliver earnings of $0.41 per share on revenue of $2.6 billion. Over the trailing four quarters, the company has topped earnings estimates three times.

Conagra has been shuffling and building its portfolio through a variety of strategic acquisitions and divestitures. These measures will prove beneficial to the company’s performance. However, the effect of divestitures might put pressure on the company’s quarterly results.

Last month, Conagra completed the sale of its Italian frozen pasta business, Gelit, to an Italian investment company owned by Consilum SGR SpA, Progressio SGR SpA, and MMM Srl for undisclosed terms. Updates on this deal and the company’s future plans will be something to watch.

The company’s bottomline is likely to be impacted by higher costs. Investments being made in its frozen and snacking business units are also likely to add to the expenses which could take a toll on earnings.

In the third quarter, Conagra topped earnings estimates despite a 16% decrease in adjusted EPS to $0.51. Net sales grew 35% to $2.7 billion but missed forecasts. The Grocery & Snacks and Refrigerated & Frozen segments continued their growth trend while Foodservice and International continued to see weakness.

For fiscal 2019, Conagra has guided for organic net sales to grow about 1%. Total company adjusted earnings from continuing operations are anticipated to be in the range of $2.03 to $2.08 per share.

Conagra’s shares have gained over 34% so far this year. The stock was down 1% in midday trade on Monday.

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