Premier North American food company, ConAgra Foods, Inc. (CAG – Analyst Report), reported results for second quarter of fiscal 2015 (ended Nov 23, 2014). Earnings from continuing operations, adjusted for items impacting comparability, came in at 61 cents per share, down 2% from 62 cents earned in the year-ago quarter. However, results were in line with the Zacks Consensus Estimate.

ConAgra Foods, Inc – Earnings Surprise | FindTheBest

Further, on a GAAP basis, ConAgra's earnings plummeted 90% year over year to 5 cents per share. The sharp decline was a result of significant non-cash impairment charges.

Revenues

ConAgra generated net revenues of $4,150 million, reflecting a marginal year-over-year fall of 1.7%. The top line also missed the Zacks Consensus Estimate of $4,199 million.

On a segmental basis, Consumer Foods revenues inched down 2% year over year to $1,977.2 million. Volumes and price/mix, each, were down by 1% year over year while foreign currency impact on quarterly sales was nil.

Revenues from the Commercial Foods segment climbed 1.9% year over year to $1,120.8 million, driven by a rise in sales from the Lamb Weston potato business. The Private Brands segment generated $1,052.0 million in revenues, down 4.8% year over year. The volume decline was due to lower production of some items such as cereal, pasta and condiments.

Margins/Costs

ConAgra's cost of goods sold remained flat at $3,261.5 million, representing 78.6% of total revenues as compared with 77.3% in the year-ago quarter. Selling, general and administrative (SG&A) expenses, as a percentage of revenue, increased 460 basis points (bps) to 17.7%.

Interest expenses dropped 17% year over year to $79.3 million owing to a fall in debt levels.

Balance Sheet/Cash Flow

Exiting second-quarter fiscal 2015, ConAgra had cash and cash equivalents of $121.9 million. Senior long-term debt (excluding current portion) stood at $7,473.1 million, down 12.8% from $8,571.5 million recorded in the preceding quarter.