The company said this week it would cut about 1,000 jobs from its total work force of 37,000. With the layoffs and reductions in expenses, ConAgra forecasts it could save about $100 millionannually. The company will also merge its packaged meats and deli operations.
"The company previously expected aggressive pricing management to improve packaged meats results in the fourth quarter," the companysaid in a press release. "The pricing actions that were taken were inadequate and were not executed to expectations."
ConAgra said it has made "several significant personnel changes" to the management team at its packaged meats operations. The company expects the changes - along with better pricingmanagement, cost-cutting programmes and stock reductions - to improve its packaged meat operations over time.
In an earnings release on 24 March, the company had forecast earnings would rise in the fourth quarter from the the 32-cents earnings per share achieved in the third quarter of the fiscalyear. Now the company says it did not forecast the market correctly and earnings are expected to be about one-third lower than expected.
"Because the expected improvement in the packaged meats business did not materialise, the contribution from the packaged meats operations in the fourth quarter will be in the range of $0.10 per share lower than the company expected when it made previous comments regardingthe fourth quarter," ConAgra said in a press release.
The company advised analysts to use the same estimate as an overall guide when advising investors on the company's earnings per share performance in the fourth quarter.
The company said it would not providing a specific fourth-quarter performance number at this time because it is still evaluating results. The company will provide figures on its fourth-quarter performancein its regularly scheduled earnings release on 30 June.
The average US retail price for a pound of choice beef rose to $4.25 in April, the second-highest month ever, the agriculture department reported. The price is five per cent higher than it was inApril 2004 and 17 per cent higher from two years ago.
The main reasons for high beef prices are continued strong demand and smaller herds because poor rainfall in much of the western part of the US reduced the food supply on grazing lands, accordingto the National Cattlemen's Beef Association. In 2004 total US beef production fell to 24,544m lbs from 26,215m lbs in2003. Meanwhile the total retail value of beef consumed rose to $79.4m from $67.3m.
ConAgra produces such packaged meat brands as Butterball, Armour, Eckrich, Healthy Choice, Hebrew National, and Brown 'N Serve.