ConAgra Earnings Preview

ConAgra (NYSE: CAG), the packaged foods maker, reports fiscal second-quarter earnings before the bell on Tuesday morning. Analysts expect earn 43 cents per share on revenue of $3.34 billion. That compares with a profit of 45 cents per share on sales of $3.16 billion a year earlier.

Over the past 90 days, analysts' forecasts for ConAgra's fiscal second-quarter results have ranged from a low of 43 cents to a high of 46 cents. Rival General Mills (NYSE: GIS) is also slated to report its fiscal second-quarter results. Year-to-date, Conagra has slightly outperformed General Mills, but the stock has lagged the returns of Dow component Kraft (NYSE: KFT), the largest U.S. food company.

Of course, the issue is costs. General Mills has been successful in passing higher costs on to brand-loyal consumers, but Nebraska-based ConAgra has warned its price increases, which have been forced by escalating commodities costs, will not boost profits in the back half of 2011.

ConAgra, the maker of the Egg Beaters, Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM, Peter Pan, Reddi-wip, Slim Jim, Snack Pack, Swiss Miss, Van Camp's, and Wesson brands, among others, has an average price target of $26.36 and that implies upside of about 4% from current levels.

The Dividend: The stock currently yields 3.8% and the company raised its dividend by a penny in October, so another dividend increase post-earnings would be considered a surprise and should not be viewed as probable.