US: ConAgra shares jump after Q2 results

By: just-food.com | 17 December 2008

Shares in ConAgra Foods rose today (17 December) after the US food giant posted a rise in underlying quarterly earnings and maintained its full-year earnings outlook.

The company booked a 27.3% jump in income from continuing operations to US$171.4m for the three months to 23 November.

On a reported basis, net income tumbled 31.3% to $168.1m but the figure included a comparison with last year's quarter, which was boosted by a trading and commodities unit sold in June.

Second-quarter sales rose 10.6% to $3.26, driven by improved revenue from its commercial foods business.

The performance led ConAgra to keep its earnings forecast for its full fiscal year. The company expects diluted earnings per share from continuing operations of "slightly above" $1.50, excluding items impacting comparability. Those items include costs linked to losses on derivatives used to hedge input costs and a fall in income tax.

CEO Gary Rodkin praised ConAgra's commercial food business and insisted the company's consumer foods division would see improvements later in the year.

"Commercial Foods continued its outstanding top and bottom-line performance by managing volatile input costs through nimble pricing actions and operating excellence," Rodkin said.

"While comparable Consumer Foods profits were down, we are confident that changes in our merchandising, slowing inflation, and other planned operating changes will reverse this trend in the back half of the year. Recent trends support our confidence for balance-of-year results."

For the first half of the year, income from contiuing operations rose 5% to $278.8m. Net sales climbed 13.6% to $6.33bn. Net income was up 45.3% to $610.5m.

Shares in ConAgra were up 8.6% to $16.35 at 10:01 ET today.

Sectors: Baby food, Chilled foods, Commodities & ingredients, Dairy

Companies: ConAgra Foods