ConAgra Foods today (9 December) reduced its full-year earnings target on the back of weaker-than-expected first-half results.

The US food giant said it would lower its fiscal 2011 diluted earnings per share forecast after cutting its target for the second quarter.

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ConAgra also blamed an earnings dilution resulting from the early payment of payment-in-kind notes receivable by a debtor.

Over the full fiscal year, the manufacturer of Chef Boyardee and Marie Callender’s said it now expects earnings per share to grow “in the low single digits” from the US$1.74 a share earned in fiscal 2010. Previously the company expected fiscal 2011 diluted EPS to show 5-7% comparable growth.

Additionally, it said that the second quarter diluted EPS will be lower than planned at around $0.45, as reported and on a comparable basis.

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ConAgra attributed the reduction to difficult category conditions, softer than planned response to promotions, and higher than planned inflation in the consumer foods segment.

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It added that weaker than expected profits from the Lamb Weston speciality potato operations also negatively impacted results.

However, ConAgra expects a year-on-year increase in operating profit during the second half due to increases in net pricing, accelerating contribution from innovation and acquired businesses, stronger second-half cost savings and improved profitability in the Lamb Weston division, driven by a higher quality potato crop.

ConAgra will report its second-quarter and half-year results on 21 December.