ConAgra profit advances on higher prices

by Eric Schroeder
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OMAHA — Higher prices and better margins helped drive a 26 percent increase in earnings at ConAgra Foods Inc. during the third quarter. Net income in the quarter ended Feb. 26 was $271.6 million, equal to 66 cents per share on the common stock, up from $214.8 million, or 50 cents per share, in the same period a year ago. Sales for the quarter were $3,373.1 million, up 7 percent from $3,141.3 million during the same quarter of the previous year.

“Conditions have been difficult across the industry due to high inflation and soft volumes for retail consumer food brands,” said Gary Rodkin, chief executive officer. “Our Lamb Weston potato business performed well, and we benefited from total margin management efforts that include price increases in both operating segment and good overall cost savings. We remain committed to our EPS goals for fiscal 2012, and we will continue our focus on deploying cash in ways that create long-term value.”

The Consumer Foods segment had operating profit of $331.3 million in the third quarter, up 20 percent from $276 million during the same quarter of the previous year. Sales in the segment were $2,157.2 million, up 4 percent from $2,072.2 million.

ConAgra said the sales increase reflected growth from several brands, including ACT II, Chef Boyardee, David, Marie Callender’s, Orville Redenbacher’s, Pam, Peter Pan, Reddi-wip, Slim Jim and Wesson. Sales also included contributions from the recently acquired National Pretzel Co., as well as from Agro Tech Foods Ltd. of India.

For the nine months ended Feb. 26, ConAgra posted net income of $528.7 million, or $1.28 per share, down 6 percent from $562.1 million, or $1.29 per share, in the same period a year ago. Net sales, meanwhile, rose 8 percent to $9,849 million from $9,093.1 million.

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