OMAHA, Neb. – Earnings at ConAgra Foods Inc. nearly doubled for the third quarter.
For the quarter ended Feb. 23, net income attributable to ConAgra Foods was $234.3 million, or 58 cents per share, compared to $120.0 million, or 28 cents per share, a year ago.
Revenues were $4.39 billion compared to $3.83 billion a year ago.
Sales in the company's Consumer Foods and Commercial Foods segment declined, while its Private Brands segment posted substantial gains.
“We are on track with our EPS projections for the second half of this fiscal year,” said Gary Rodkin, ConAgra Foods’ CEO. “As we have previously discussed, there are operating challenges that have impacted segment performance and overall EPS growth, but we are encouraged by some pockets of strength. This quarter we posted good sales and market share performances for some of our consumer brands, good international growth for our potato operations, and continued improvement in the operations and organization for our private brands. The synergies expected from the former Ralcorp businesses are coming in slightly ahead of plans, and we continue to make good progress on SG&A efficiency initiatives. We reaffirm our full year fiscal 2014 EPS guidance, and remain confident in our long-term strategy and outlook.”
Sales declined 3 percent in the Consumer Foods segment, which posted a $1.9 billion operating profit. Healthy Choice, Orville Redenbacher’s and Chef Boyardee, which account for annual sales in excess of $1 billion, continue to face challenges and are posting substantial volume declines, according to ConAgra.
“The company has important product changes, in-store initiatives, and refinements to consumer communication under way, which are expected to gradually improve the volume and profit performance of these brands throughout fiscal 2015,” the company said.
Sales grew for Bertolli, Hebrew National, Reddi-wip, Ro*Tel, Slim Jim, Swiss Miss, Wolf and other brands.
ConAgra reported sales for the Commercial Foods segment were $1.5 billion, down slightly compared with $1.5 billion a year-ago. Segment operating profit dropped 12 percent to $163 million.
The Ralcorp acquisition is starting to show substantial results, according to the company. Sales for the Private Brand segment grew to $1.1 billion, an increase of more than $600 million compared to a year ago, ConAgra noted.
“As previously discussed, profitability for the Private Brands segment is below plan this fiscal year in part due to sales force and supply chain transition issues, as well as pricing actions implemented in response to competitive pressure,” ConAgra noted. “As part of improving connections with customers as the company works through those issues, and to remain competitive in the marketplace, the company has made deliberate pricing concessions to protect volumes; these concessions have negatively impacted margins.”
ConAgra issued earnings guidance of $2.22-$2.25 per diluted share for fiscal 2014. The company expects strong cash flow, and plans to repay approximately $550 million of debt in the fiscal year.