Conagra (CAG) Cuts Dividend

[grumpy]

CAG announced that it is cutting its dividend 34%. I already have my sell order in. Not one of my better choices for a dividend paying stock. At least Uncle Sam will cover a portion of my loss come tax time.

Grumpy

[maddythebeagle]

I dont invest in them or follow them much, what went wrong?

[grumpy]

News article:

ConAgra Foods Inc. plans to cut its quarterly dividend by 34% as part of a series of moves the packaged-foods giant announced Thursday aimed at boosting its long-term operating performance.

Management also gave a profit outlook for its next fiscal year, which begins in late May, that missed Wall Street's estimates.

The company also announced plans to sell off its seafood unit and its domestic and imported cheese businesses. This follows the company's February announcement that it would divest most of its refrigerated-meats operations.

The dividend will be paid at 18 cents a share, down from 27.25 cents in the most recent quarter, but "continues to represent one of the highest payout levels among consumer-food companies," Omaha, Neb.-based ConAgra said Thursday.

ConAgra said it also plans to increase annual marketing spending and reduce administrative costs. Plant "rationalization" and supply-chain improvements also are planned, the company said.

The restructuring moves will result in unspecified charges, some of which will be noncash in nature, ConAgra said.

The series of moves are being undertaken at the direction of Gary Rodkin, the president and chief executive who joined ConAgra last fall after serving as CEO of PepsiCo Inc. "It is essential that we increase our investments behind our highest potential brands, simplify our portfolio of businesses and build a high-quality earnings trajectory for ConAgra," Mr. Rodkin said in a statement. "The planned divestitures are the catalyst for our ability to attack costs, streamline our operations and return quickly to recent earnings levels, but with a significantly stronger foundation for future performance," he said.

ConAgra's moves will mean earnings for the fiscal year that begins in May won't be as high as previously anticipated. As revised, the company said it now expects to post a profit in a range of $1.10 to $1.15 a share for the year ending in May 2007. Analysts, on average, have been looking for earnings of $1.36 a share for fiscal 2007. In addition, the packaged-foods company said it would record unspecified charges against results for the third quarter of fiscal 2006. ConAgra also said it expects to "return to current earnings levels during fiscal 2009."

ConAgra's board said the quarterly dividend of 18 cents a share will be payable June 1 to shareholders of record as of May 1.

Shares of ConAgra declined 34 cents, or 1.6%, to end Wednesday's trading at $20.41 apiece.

Grumpy