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Conagra Brands down 16.5% on mixed Q2 results; Campbell gets new president, CEO

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Conagra Brands down 16.5% on mixed Q2 results; Campbell gets new president, CEO

TOP NEWS

* Conagra Brands Inc. shares dropped 16.53% after the company cut its adjusted earnings forecast for fiscal 2019 to a range of $2.03 to $2.08 per share. The company reported a 9.7% rise in net sales to $2.38 billion, in the second quarter ended Nov. 25, missing the S&P Global Market Intelligence mean consensus estimate of $2.41 billion. The packaged food company's net income came in at 31 cents per share, down 43.6% from 55 cents per share a year ago in the same period. The quarter's results reflected Conagra's $10.9 billion acquisition of Pinnacle Foods Inc. in October.

* As expected, Campbell Soup Co. said it appointed Mark Clouse as its new president and CEO, effective Jan. 22, 2019. He will replace interim CEO Keith McLoughlin, who stepped into the role in May and oversaw Campbell's bid to streamline itself amid pressure from activist investors. Clouse will also become a board director. He was CEO of Pinnacle Foods Inc. until it was acquired by Conagra Brands Inc.

FOOD RETAIL & DISTRIBUTION

* Online food delivery provider Delivery Hero SE said it agreed to sell its entire German business to Dutch peer Takeaway.com NV for about €930 million in cash and stock. The deal, which includes the Lieferheld, Pizza.de and Foodora brands in Germany, will also allow Delivery Hero nominate an independent member to Takeaway.com's supervisory board. Subject to approval at a Takeaway.com meeting scheduled for March 5, 2019, the deal is expected to close in the first half of 2019.

* Hong Kong-based retail company Dairy Farm International Holdings Ltd. appointed Ben Keswick as director and chairman of China's Yonghui Superstores Co. Ltd., effective Dec. 20. Keswick, who is the chairman and managing director of Dairy Farm and group managing director of Dairy Farm's parent, Jardine Matheson Holdings Ltd., replaces Zhang Xuansong in the position. Xuansong will continue day-to-day management of the business as executive director, according to the release.

* Naspers Ltd. led a $1 billion series H round in India's online food delivery startup Swiggy, with a $660 million investment in the company. Swiggy will use the capital raised to add more food brands, address supply gaps through delivery-only kitchens, hire staff for machine learning and engineering roles, and focus on building an artificial intelligence-driven platform for hyperlocal discovery and on-demand delivery.

BEVERAGES

* Coca-Cola Co. has taken an unspecified minority stake in premium beverage startup Iris Nova to become its largest investor, Bloomberg News reported. The Atlanta-based soft drink giant led a $15 million funding round that values the maker of Dirty Lemon premium drinks at about $60 million, according to the report. Iris Nova said other investors taking part in the fundraising included retired New York Yankees player Alex Rodriguez, actress Kate Hudson and tech industry veteran Tim Armstrong.

* British distiller Diageo PLC said it agreed to sell its South African sorghum beer unit United National Breweries (SA) (Pty) Ltd to Zimbabwe-based beverage maker Delta Corp. Ltd. for an undisclosed sum. The deal is expected to close in the second half of fiscal 2019, subject to regulatory approval. In a separate release, Diageo announced it completed the previously announced sale of a portfolio of 19 brands to U.S. alcohol group Sazerac Co. Inc. for a total consideration of $550 million.

* Israel-based firm SodaStream International Ltd. is establishing a manufacturing plant in the Gaza Strip, Reuters reported, citing its CEO Daniel Birnbaum. SodaStream was recently acquired by PepsiCo Inc. for $3.2 billion. Other details were not disclosed.

* Australia's Coca-Cola Amatil Ltd. rolled out a children's version of its Mount Franklin spring water brand, offering three flavors — pineapple, apple, and lemon and lime — and contains no sugar or preservatives. The product line features its newly-launched pop-top SyLon closure, and the bottles are 100% recyclable.

AGRICULTURAL PRODUCTS

* France's Société Coopérative Agricole Axereal agreed to buy the malt business of U.S. agri giant Cargill, through its subsidiary Boortmalt, for an undisclosed sum. The deal between Axereal's malt subsidiary Boortmalt and Cargill covers 15 plants across four continents with more than 500 staff, according to the statement. The deal, subject to closing conditions, is expected to close in the second half of 2019.

* China plans to make a third round of U.S. soybean purchases within days, after a trade truce between two countries, Reuters reported, citing sources familiar with the development. China is likely to purchase more than 2 million tons of soybean before the Christmas holiday on Dec. 25, bringing total U.S. sales to China to over 5 million tons in December, the report added, citing one of the sources.

PACKAGED FOODS

* United States Department of Agriculture laid out a new standard that requires companies to put labels on food products that contain genetically modified ingredients as early as 2020. According to the notice, the companies will have to use the term "bioengineered" instead of the more commonly used "genetically modified," and disclose information about the ingredients in form of text, symbol or an electronic link. Companies can also use a QR code that will lead the user to the product's website for more food information.

* Australian private equity firm Pacific Equity Partners and global asset manager Carlyle Group LP are joining forces to bid for Arnott's Biscuits Ltd, The Australian Financial Review's Street Talk blog reported, citing unnamed sources. The partners reportedly were expected to make an indicative buyout offer Dec. 20, the due date of the first round of proposal letters. Goldman Sachs' Australian office was tapped to conduct the auction for Arnott's and is likely to short-list the prospective buyers over the Christmas break, with second-stage diligence scheduled for early 2019.

* Indonesian palm oil producer PT Triputra Agro Persada's owners, including Singapore's sovereign wealth fund GIC Special Investments Pte. Ltd., are exploring its possible sale, Bloomberg reported, citing people with knowledge of the matter. The company's shareholders including Northstar Group asked banks to advise the firm on options, including an initial public offering, the sources added. Discussions are at an early stage and may not result in a sale or IPO of the company, the people added.

RESTAURANTS

* Texas-based company Del Frisco's Restaurant Group Inc. said it is evaluating strategic options for its business, including a possible sale, according to a statement. The company, which has formed a transaction committee to assist in its evaluation of strategic alternatives, added that there is no assurance that this move will result in a transaction.

* U.K. restaurant chain Patisserie Holdings PLC said it plans to appoint RSM UK Audit LLP as its new auditor, replacing Grant Thornton FSBC Ltd, Reuters reported. The move comes as the company attempts to recover from an accounting black hole it uncovered in October, which led to the arrest of its CFO Chris Marsh and suspension of trading in its shares.

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The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, Hang Seng rose 51% to 25,753.42, while the Nikkei 225 was down 1.11% to 20,166.19.

In Europe, around midday, the FTSE 100 fell 0.27% to 6,693.58, and the Euronext 100 was down 0.52% to 905.98.

On the macro front

The Durable Goods Orders report, the Gross Domestic Product report, the Corporate Profits report, the Personal Income and Outlays report, the Consumer Sentiment report, the Kansas City Fed Manufacturing Index and the Baker-Hughes Rig Count report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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