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Con Agra Disappoints Once More

Bedeviled packaged food giant ConAgra Foods (CAG) was floored Thursday after announcing

an aggressive restructuring plan aimed to strengthen its long term operating performance. The company, whose brands include Chef Boyardee, Healthy Choice, and Butterball, also said it would cut its dividend by approximately 34%.

Under the restructuring, ConAgra said it plans to sell its seafood and cheese businesses, a move that follows the company's February announcement that it would sell most of its refrigerated meats operations. Collectively, those businesses accounted for approximately $2.8 billion of the company's $14.6 billion in annual revenue. The company also declared a quarterly dividend of $0.18 per share, payable on June 1, 2006 to shareholders of record as of May 1, 2006. That is 9.25 cents per share, or roughly 34%, lower than its most recent quarterly dividend, as it plans to increase its investments in its key brands to build higher quality earnings in the future.

ConAgra expects fiscal 2007 earnings in the range of $1.10 to $1.15 per share -- the current risk/reward stinks, in other words. No wonder, then, that there is just one lonely buy recommendation among Street analysts.

posted by Catablast! Media Group @ 1:27 PM