OMAHA, Neb. – Volume gains executives with ConAgra Foods, Inc. expected to occur in the third quarter arrived in the second quarter of fiscal 2014 and contributed to a rise in earnings for the company. For the quarter ended Nov. 24, ConAgra’s net income was $252.4 million, equal to 59 cents per share on the common stock, up 13.5 percent from the same quarter of fiscal 2013 when the company earned $216.5 million, or 52c per share.
Sales for the quarter were $4,713.9 million, up 26 percent from the previous year when sales were $3,727.2 million.
“Some of the EPS strength in the fiscal second quarter reflected some volume that we were expecting early in the fiscal third quarter, and we still expect good comparable EPS growth in the second half of fiscal 2014,” said Gary Rodkin, CEO. “Challenging industry conditions make us cautious about the near term, and our fiscal 2014 EPS guidance reflects this. Taking our strong second-quarter EPS performance and the industry environment into consideration, we are reaffirming our EPS goal in the range of $2.34 to $2.38, adjusted for items impacting comparability.”
Operating profit within ConAgra’s Consumer Foods segment rose 13 percent compared with the previous year and posted sales of approximately $2 billion. Brands posting sales growth for the quarter included Hebrew National, Hunt’s, Marie Callender’s, Reddi-wip, Ro*Tel, Rosarita, Slim Jim and Wolf, according to the company.
Operating profit within the Commercial Foods segment was $169 million, 13 percent lower than the same quarter of the previous year. Sales for the quarter were $1.6 billion. Part of the decline was due to the company’s Lamb Weston potato products business, which saw its profits come in below year-ago amounts due to a major food service customer that did not renew a sizeable amount of potato business toward the end of the last fiscal year.
ConAgra’s flour milling sales decreased, reflecting the pass-through of lower wheat costs, while milling profits were in line with year-ago amounts. Profits for the rest of the segment were in line with year-ago amounts, favorably influenced by $5 million of contribution from Ralcorp’s food service operations, which are now a part of the Commercial Foods segment.
Sales for ConAgra’s Private Brands segment were $1.1 billion in the quarter, up more than $900 million over year-ago amounts. The increase reflects the integration of Ralcorp’s private label business. Operating profit for the segment was $89 million.
The Private Brands operations are focused on six product lines: bars, cereal, condiments, pasta, snacks and retail bakery. ConAgra said the former Ralcorp businesses are expected to contribute about 25 cents per share of diluted EPS during fiscal year 2014.