(Updates with added comments from a conference call and other
information)
ConAgra Foods Inc.'s (CAG) fiscal third-quarter earnings rose
19% as the maker of Chef Boyardee pasta, Hunt's ketchup and Peter
Pan peanut butter significantly ramped up profitability at its
consumer segment.
Still, the company's overall sales fell a notch and the stock
was recently down 3% to $25.24. The company said it ramped up
couponing to draw consumers to new products and expects to continue
launching new offerings on such brands as its Healthy Choice and
Marie Callender's meals.
Packaged-food makers have benefited recently as consumers eat
more meals at home rather than out. The company has also been
helped by lower commodities costs and improved margins.
For the quarter ended Feb. 28, ConAgra reported a profit of
$229.6 million, or 51 cents a share, up from $193.2 million, or 43
cents, a year earlier. Excluding hedging and other gains, earnings
from continuing operations rose to 44 cents a share from 40 cents.
Revenue fell 0.9% to $3.1 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 44 cents a share on $3.15 billion in revenue.
Sales at the consumer-foods unit, ConAgra's biggest, sales rose
2.2% amid strong performances of Banquet, Chef Boyardee and Hunt's
products, among others. Profit for the segment jumped 25% as volume
increased 3%. Sales at the commercial-foods segment dropped 6.3%
amid lower flour costs that were passed on to customers while
profit rose 5.5%.
The company, which supplies to the food service industry through
its commercial foods segment, said on a conference call that it is
seeing some signs of life in the food service industry but that
many restaurants are still facing challenges due to consumer
cutbacks.
-By Nathan Becker and Anjali Cordeiro, Dow Jones Newswires;
212-416-2855; nathan.becker@dowjones.com