OMAHA, Neb. – Acquisitions and successful marketing drove higher-than-expected earnings at ConAgra Foods Inc. during the first quarter.
For the quarter ended Aug. 26, the company reported net income of $250.1 million, or 61 cents per share, compared to $93.8 million, or 22 cents per share in the year-ago period. Net sales for the company advanced 6.7 percent to $3.31 billion.
"We are very pleased with our strong start to fiscal 2013. Based on continued momentum in our potato operations, effective margin management initiatives across the portfolio, and contribution from acquisitions, we are able to post a strong EPS performance in the midst of difficult marketplace conditions," said Gary Rodkin, ConAgra Foods' chief executive officer. "It is clear that our operating capabilities, strategic initiatives, and prudent capital allocation are accelerating EPS performance. We have raised our EPS expectations for fiscal 2013 while continuing to make strong levels of marketing investment as part of long-term brand building initiatives."
Sales in the consumer foods segment climbed 8 percent on the strength of acquisitions, according to the company. Operating profit for the segment grew 20 percent to $235 million. Brands posting sales growth for the quarter include ACT II, Lightlife, Marie Callender's, Orville Redenbacher's, PAM, Peter Pan, Reddi-wip, Ro*Tel, Rosarita, Slim Jim, Wesson, and others.
Odom’s Tennessee Pride, and the Bertolli and P.F. Chang’s Home Menu frozen businesses were among the company’s recent acquisitions. The company also made double-digit increases in marketing in order to build long-term brand strength. Outlook for the segment was positive.
"Despite the recent increase in many commodities prices, net inflation for the Consumer Foods segment is expected to be slightly lower than originally planned," ConAgra said. "This reflects the company's effective procurement and hedging programs as well as the nature of the company's raw input needs.
"The segment's year-over-year volume performance is expected to improve throughout the fiscal year as the company laps the volume impact of price increases taken in fiscal 2012; the segment's innovation pipeline and increased marketing investment are expected to contribute to sequentially improved volume performance as the fiscal year progresses."
First-quarter sales in the commercial foods segment gained 5 percent to $1,269 million. Strong performance by the Lamb Weston potato operations contributed to the segment’s performance, according to the company.
ConAgra raised its earnings-per-share outlook for fiscal 2013, with earnings forecast to be in the range of $2.03 - $2.06 adjusted for items impacting comparability. This includes a strong year-over-year increase in marketing.
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