ConAgra dividend cut; more brands to be sold

ConAgra dividend cut; more brands to be sold

ConAgra dividend cut; more to be sold

ConAgra Foods Inc., the maker of Chef Boyardee pastas and Peter Pan peanut butter, slashed its dividend by about a third Thursday and said it will sell its seafood and cheesemaking units after profit last year fell the most since 1999.

The Omaha-based company's shares fell 4.5 percent on the New York Stock Exchange, to $19.50, the biggest drop since June 2005 and the lowest closing price since June 2001.

Some investors said the firm did not go far enough in unloading low-profit products.

"I expected them to divest more than what has been cumulatively announced," said Matthew Kaufler, a portfolio manager with Clover Capital Management in Rochester, N.Y. "The dividend cut was in line with what I expected, but ConAgra has a long road ahead of them."

ConAgra will boost its advertising spending by 21 percent, to $425 million, mostly for top-selling brands such as Pam cooking oil, Reddi-wip topping and Orville Redenbacher's popcorn, Chief Executive Gary Rodkin said.

Sales are down 46 percent since 2001, as the company sold units and lost market share to rivals such as Northfield-based Kraft Foods Inc.

ConAgra, which also makes Banquet and Healthy Choice dinners, said last month that it will sell its Butterball turkey and Armour meat brands. The company, which has 70 brands, said Thursday that it will sell its Singleton seafood unit, which had $290 million in sales last year, and the Swissrose cheese unit, which had $200 million in sales.

Combined with earlier announcements of agreements to sell the Louis Kemp seafood unit and Cook's Ham brand, the divested businesses had sales of $2.8 billion, Rodkin said. That's 19 percent of ConAgra's revenue in fiscal 2005.

Sales of ConAgra products, such as sliced lunch meats from Armour, Butterball and Hebrew National, fell 16 percent since February 2005, AC Nielsen Financial Service estimates. Hot dog sales dropped 26 percent.

The quarterly dividend was cut to 18 cents a share from 27.5 cents. The company, which last year failed to raise its dividend for the first time since 1975, was spending $565 million a year on the dividend, the fifth highest on a yield basis of companies in the Standard & Poor's 500 index.

Boutique executive search services with best in class global network, contacts and market mastery.

Deeply connected and engaged personal service approach, long-term investment in client community and 25 year history of strong relations with both Multi-National leaders and Private Equity partners.