US food group ConAgra Foods has posted second-quarter diluted earnings per share of US$0.43, up 48% from $0.29 in the corresponding period last year.

However, the company said that excluding items affecting comparability, second-quarter diluted earnings per share were $0.40, up 38% from last year.

"Rapid expansion of our operating margins is helping build a solid foundation for the future," said CEO Gary Rodkin. "Together with earlier than expected completion of key divestitures, this is providing a significant boost to our fiscal 2007 results. Our progress puts us on track for a better EPS performance this year than we originally expected, and is providing the fuel that will allow us to make increased marketing and innovation investments."

Rodkin added that while the company expects productivity gains to be the main driver of solid earnings performance throughout the remainder of fiscal 2007, marketing investment would  help deliver future bottom-line improvements through top-line growth in key brands.

For the quarter, sales in ConAgra's Consumer Foods division reached $1.8bn, on a par with last year. Operating profit from the division was $287m, 17% above the $245m reported last year.  Improved mix, pricing gains and more effective trade spending contributed to the solid sales performance for key brands, the company said. Sales for the company's priority investment brands, which represented 75% of the segment sales, increased by 2% overall, while sales for the balance of the segment decreased by 6%.

Sales from the Food and Ingredients division were 10% up on last year at $886m, reflecting higher flour prices driven by increased input costs, stronger volumes for potato products, as well as better prices and sales mix across several other product lines. The division's operating profit rose by 28% to $118m.

Meanwhile, sales from ConAgra's Trading and Merchandising division increased by 3% to $297m, with operating profit up 19% at $39m. The company's International Foods division saw sales fall by 1% to $154m, but operating profit from the division rose from $15m to $18m.