• EPS guidance lifted
  • Profits rise 43%
  • Sales dip 3%

ConAgra Foods has raised its earnings forecast for fiscal 2010 after booking higher second-quarter profits thanks to lower commodity prices and the trend for US consumers to eat at home.

Although sales at ConAgra's commercial business fell 11% - causing total sales to slip 2.4% to US$3.17bn - profits rose 1%.

Meanwhile, consumer foods sales, which account for 64% of total revenue, rose 3% on volume growth of 2%. Consumer food earnings climbed 31% amid the lower costs.

Overall, ConAgra's gross margin rose to 26.9% from 21.1% on lower ingredient costs.

ConAgra, the maker of Healthy Choice and Chef Boyardee, earned $239.7m for the three months to 29 November, up 43% on the comparable period of last year when earnings totalled $168.1m.

Income from continuing operations jumped from $172.1m last year to $239.7m this year.

ConAgra increased its earnings per share outlook for the full year to $1.73 a share from $1.70.

For the full press release click here and click here for CEO Gary Rodkin's insistence that the company has steered clear from "unsustainable" promotions.