July 15, 2024

ConAgra’s Net Income Beats Expectations

ConAgra Foods, like many food companies, is dealing with higher prices for ingredients, packaging and fuel and has raised its prices to offset those increases.

“The marketplace environment remains difficult due to continuing inflationary pressures and the impact of the current economy on consumers, so we are cautious about business conditions,” said Gary Rodkin, the chief executive.

But Mr. Rodkin acknowledged price increases were helping offset higher costs.

“We’re not declaring victory, but we’re making good progress,” he said during a call with analysts.

The results for the company, based in Omaha, Neb., were better than analysts expected, and ConAgra reaffirmed its fiscal 2012 outlook. Its shares rose $1.02. or 4 percent, to $26.19.

Net income fell to $171.8 million, or 41 cents a share, compared with $200.9 million, or 46 cents a share, in the period a year earlier. Excluding one-time items related to derivatives and restructuring, net income was 47 cents a share.

Revenue rose 8 percent, to $3.4 billion from $3.15 billion.

Sales of branded consumer foods, the company’s largest division that makes up 63 percent of sales, rose 4 percent, to $2.18 billion.

Top sellers were Banquet, Chef Boyardee, Hunt’s, Marie Callender’s, Orville Redenbacher’s and others.

Article source: http://feeds.nytimes.com/click.phdo?i=8f6b0d1c73fd2aa6eb9c0758a1c11102

Food and Gasoline Drove Consumer Prices Higher in September

The report, from the Labor Department, showed that the overall Consumer Price Index rose 0.3 percent last month compared with a 0.4 percent increase in August. Gasoline prices rose at a faster pace, while the increase in food prices slowed.

The core C.P.I., which strips out such volatile categories, increased 0.1 percent in September, its smallest rise since March, compared with 0.2 percent in August. It was kept in check by some of its crucial components, like rents, which rose moderately, and automobiles, which did not rise at all. Apparel, used cars and recreation declined.

The report, which reflects seasonally adjusted figures, showed that inflationary pressures had been largely contained despite a rise in wholesale prices. And some commodity prices are expected to moderate in the months ahead as lower energy costs start to filter through the data, according to Russell Price, a senior economist with Ameriprise Financial.

“That is the lagging impact of petroleum prices,” he said.

The overall consumer index was 3.9 percent in the 12 months through September compared with 3.8 percent in August. Gasoline rose 2.9 percent in September, compared with 1.9 percent the month before. Food prices were up 0.4 percent, compared with 0.5 percent in August.

In the 12 months through September, the core index was up 2 percent, the same rate as in the 12-month period through August.

“The core prices are starting to show that they are easing,” said Chris Christopher, the United States economist for IHS Global Insight. “So hopefully, for consumers in particular, prices will start moderating significantly.”

The report also showed that the Consumer Price Index for urban wage earners and clerical workers increased 4.4 percent over the last 12 months. That measure is used as a basis, in the third quarter, for cost of living adjustments in Social Security payments. The government said on Wednesday that those monthly benefits would increase 3.6 percent starting in January, the first adjustment since 2009.

Mr. Christopher noted that actual net checks to retirees would probably not rise that percentage amount because of increases in Medicare premiums.

“At least it is mitigating,” he said.

Government reports released on Wednesday also provided a glimpse of other areas of the economy, including the job market and the housing market, which continues to be challenged by financial pressures on households and a large supply of homes.

The Federal Reserve said in its beige book, a survey of regional economic conditions, that overall economic activity was expanding, according to information collected through Oct. 7, although many of its 12 districts described growth as modest or slight.

The beige book reported limited demand for new employees. Some districts noted difficulties finding skilled workers or said hiring had been hampered by an uncertain outlook for business or lower expectations for growth.

Residential construction remained at low levels, it said, particularly for single-family homes, while there was a moderate increase in the building of multifamily dwellings. In contrast, the report said, rental demand continued to rise.

Those observations were consistent with government statistics showing that housing starts, which reflect the commitment of builders and suggest that consumer spending on durable goods could follow, were up 15 percent, mostly for multiple family units. But there was no significant increase in the trend for the start of construction on single-family units.

“This is consistent with reports that home builder confidence remains severely depressed,” Joshua Shapiro, chief United States economist at MFR, said in a research note.

Celia Chen, a senior director at Moody’s Analytics, said uncertainty about jobs and problems with foreclosures have affected the single-family housing market. Home values have fallen, and it is still difficult for many people to get a mortgage.

“Many of the households forming right now are just not going to have the wherewithal to purchase a home,” Ms. Chen said.

“The ownership market faces many headwinds,” she added. “All the strength we are seeing is on the multifamily side.”

Article source: http://feeds.nytimes.com/click.phdo?i=4646092dcf68de732b08a2c2d934bc0b

Bernanke Defends Fed’s Role in Running Economy

Mr. Bernanke said he remained convinced that recent increases in oil prices would subside, and he saw little evidence of broader price increases in the foreseeable future.

“While it is very, very important to help the economy create jobs and help to support the recovery, I  think every central banker understands that keeping inflation low is absolutely essential to a successful economy and we will do what we can to make sure that happens,” he said.

Mr. Bernanke spoke after the Fed lowered its projections for domestic economic growth in 2011, predicting expansion of 3.1 percent to 3.3 percent. In January, the Fed had predicted growth of 3.4 percent to 3.9 percent, but Mr. Bernanke said that exports, construction spending and military spending have all been lower than expected.

The Fed’s policy-making committee voted unanimously Wednesday to maintain several policies intended to stimulate growth, including holding short-term interest rates near zero and maintaining the Fed’s investment portfolio at its current level, about $2 trillion. The Fed will complete a plan to purchase $600 billion in Treasury securities by the end of June.

Mr. Bernanke said that the recovery had become self-sustaining, meaning that growth would continue even without extraordinary government support, although he added that he still wanted to see a faster pace of growth and more job creation.

But Mr. Bernanke cautioned that if the economy did falter, it could prove difficult for the Fed to take additional stimulative steps because of growing inflationary pressures.

“The trade-offs are getting harder at this point,” Mr. Bernanke said. “Inflation is getting higher. It’s not clear that we can get substantial improvements in payrolls without some additional inflation risks and in my view we can’t achieve a sustainable recovery without keeping inflation under control.”

Mr. Bernanke spoke at an unprecedented news conference, answering questions from reporters in a break with the Fed’s long tradition of providing nothing more than its statement to describe the decisions made by the Federal Open Markets Committee.

He is seeking to build public understanding and support for the central bank’s controversial programs. His remarks may also create a reference point for investors confused by the cacophony of contradictory speeches given by other members of the policy-making committee in the wake of each meeting.

The decisions by the Fed’s policy-making board, announced Wednesday at the conclusion of a two-day meeting, reflected the central bank’s judgment that the economy still needed help and that providing assistance was unlikely to ignite inflation.

“Commodity prices have risen significantly since last summer, and concerns about global supplies of crude oil have contributed to a further increase in oil prices since the committee met in March,” the committee said in a statement. “Inflation has picked up in recent months, but longer-term inflation expectations have remained stable and measures of underlying inflation are still subdued.” 

The Fed’s statements after recent meetings have suggested a gradual increase in its confidence in the health of the economy. The most recent statement, issued Wednesday described the recovery as “proceeding at a moderate pace.”

“Household spending and business investment in equipment and software continue to expand,” the statement said.  “However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed.”

It also said that the labor market conditions “are improving gradually.” After its March meeting, the committee said conditions “appear to be improving gradually.”

The government’s official unemployment rate — the share of the labor force actively seeking jobs — remains at very high levels, although it fell to 8.8 percent in March  from a peak of 10.1 percent in late 2009. Moreover, the unemployment rate would be more than twice as high if the government chose to include the large numbers of Americans who have stopped looking for work or accepted part-time jobs.

The Fed said Wednesday that it would maintain short-term rates near zero “for an extended period.”

Moreover, while the Fed will conclude its program of asset purchases in June, the central bank said that it would continue to maintain its investment portfolio at its current size, well over $2 trillion, by reinvesting any principal payments.

“Increases in the prices of energy and other commodities have pushed up inflation in recent months.  The committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations,” the statement said.

Critics of the Fed’s position on inflation argue that higher commodity prices will push up the price of other goods and services. But Mr. Bernanke and his allies consider it more likely that the higher prices will force Americans to reduce consumption, because wages are not rising and therefore Americans do not have more money to spend. As demand drops, they say, the price of food, oil and other commodities will also fall.

Fed officials emphasize that they are concerned about the price of food and oil. But they say that best way to keep those prices stable over the long term is to ignore short-term fluctuations, just as drivers are taught to steer straight by looking down the road.

The Fed finds evidence for its position in measures of “core inflation,” which track the movement of goods that change prices more slowly. Those measures generally show moderate price increases, which the Fed regards as healthy.

The decision was once again unanimous, despite public speeches by some members expressing misgivings that the Fed is underestimating the risks of inflation. So far, however, the most vocal critics — Charles I. Plosser, president of the Federal Reserve Bank of Philadelphia, and Richard W. Fisher, president of the Federal Reserve Bank of Dallas — have not registered their concerns in the form of dissenting votes.

The committee next meets June 21-22.

Article source: http://www.nytimes.com/2011/04/28/business/economy/28fed.html?partner=rss&emc=rss