As the popularity of french fries and other potato products continues to rise around the world, ConAgra aims to satisfy that craving.
The worldwide frozen potato category is forecast to surge by 1.8 billion pounds between 2013 and 2018, according to Euromonitor. ConAgra's Lamb Weston frozen potato unit has been aggressively expanding its operations globally.
The Omaha, Neb.-based food giant on Dec. 4 said its Lamb Weston-Meijer joint venture will invest about $150 million to add a second production line to its frozen potato processing plant in the Netherlands. In late November, it opened its first plant in China—a potato processing facility in Shangdu, Inner Mongolia. It acquired the plant with its July purchase of TaiMei Potato Industry.
On the home front, ConAgra in June completed a $200 million expansion of its Lamb Weston frozen potato plant in Oregon.
The maker of Chef Boyardee, Orville Redenbacher's and other brands will report fiscal Q2 results before the open on Thursday. Analysts expect earnings per share to slip 2 percent to 61 cents on 11 percent lower sales of $4.2 billion.
For the full year ending in May, estimates call for a 7 percent profit gain and a 6 percent increase in 2016. Earnings dipped 2 percent in fiscal 2014, after rising 4 percent to 35 percent the prior five years.
ConAgra's three-year earnings growth rate is 8 percent. Its three- and five-year Earnings Stability Factor is 3 on a scale from 0 to 99, with 0 being the most stable. Its current dividend payout is 25 cents a share, or $1 on an annualized basis. That works out to a 2.7 percent yield, above the 1.87 percent average for the S&P 500.
The stock is extended 11 percent past a 32.98 cup-with-handle buy point it cleared in mid-September. It's now nearing a higher, 37.38 entry point of a much larger saucer base. Shares advanced 10 straight weeks before edging lower last week. An A- Accumulation/Distribution Rating points to net buying by mutual funds.
Source: Nasdaq