June 30, 2020 / 12:06 PM / 11 days ago

UPDATE 2-Conagra Brands forecasts profit above estimates, beats Q4 expectations

(Adds details on outlook and sales, analyst comment; Updates shares)

June 30 (Reuters) - Conagra Brands Inc on Tuesday forecast current-quarter profit above estimates after reporting strong fourth-quarter results as coronavirus-led lockdowns fueled demand for its frozen foods and snacks, sending the company's shares up 4%.

Demand for packaged foods with long shelf lives has continued into the current quarter even as many U.S. states ease restrictions, with consumers working from home looking to avoid going to restaurants due to fears of contracting the virus.

The Chef Boyardee pasta maker said it expected to earn 54 cents to 59 cents per share on an adjusted basis in the first quarter, above Wall Street expectations, according to IBES data from Refinitiv.

Conagra also estimated organic net sales to rise 10% to 13%, even as it expects decreased demand for products the company sells directly to restaurants.

"Many consumers are rediscovering the enjoyment associated with at-home eating, whether it's making fun baked goods, cooking with the family or enjoying a movie night with some snacks," Chief Executive Officer Sean Connolly told analysts on the earnings call.

The company also reaffirmed its fiscal 2022 outlook, prompting JP Morgan analyst Ken Goldman to call the move "a modestly positive surprise" given that some investors were curious if the forecast range would be cut.

Net sales rose nearly 26% to $3.29 billion in the quarter ended May 31, while organic net sales rose 21.5%. Excluding one-time items, Conagra earned 75 cents per share.

Analysts were expecting a profit of 66 cents per share and revenue of $3.11 billion. (Reporting by Praveen Paramasivam in Bengaluru; Editing by Krishna Chandra Eluri)

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