ConAgra Foods Inc.'s (CAG) fiscal second-quarter earnings jumped
43% amid lower commodities costs and market-share gains at its
consumer-foods business.
Results beat analysts' expectations, and the company again
raised its earnings forecast for the year, this time by 3 cents to
$1.73 a share, to reflect a strong first-half performance.
Packaged-food makers' sales have benefited this year as
consumers eat more meals at home and as commodities prices have
retreated from peaks last year. ConAgra is among the companies
selling consumer staples that have raised their dividends in recent
months.
For the quarter ended Nov. 29, the maker of Chef Boyardee pasta,
Hunt's ketchup and Peter Pan peanut butter reported a profit of
$239.7 million, or 54 cents a share, compared with $168.1 million,
or 37 cents a share, a year earlier. Excluding hedging and other
impacts, earnings from continuing operations rose to 52 cents from
43 cents.
Revenue decreased 2.4% to $3.17 billion, as commercial-foods
segment sales slid 11%.
Analysts polled by Thomson Reuters most recently forecast
earnings of 47 cents on revenue of $3.33 billion.
Gross margin climbed to 26.9% from 21.1% on lower ingredient
costs.
At its consumer-foods unit, its largest, sales rose 3% amid
stong sales of its Banquet, Chef Boyardee, Healthy Choice and Marie
Callender's and other brands. Volume grew by 2% and earnings
climbed 31% amid the lower costs.
At its commercial-foods segment--which includes dehydrated
vegetables and seasonings, as well as milled grain products--sales
fell 11% amid lower flour prices and food-service industry woes.
Still, profit was up 1%.
Shares closed Friday at $22.16 and didn't trade premarket. The
stock is up 34% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com