(Updates with recent stock price and comments from an interview
with the company's chief executive)
DOW JONES NEWSWIRES
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 declined and came in slightly
below analyst estimates. The stock was recently down 4.5% to
$24.94. 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.
In an interview Chief Executive Gary Rodkin said the company's
flour milling business--which passed on lower wheat costs to
customers--was the main factor behind the sales decline in the
quarter. The company was pleased with the performance of its
consumer segment, which sells such brands as Hunt's, he said.
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