US packaged foods group ConAgra Foods Inc. has reported third-quarter net income of US$192.6m, compared with a net loss of $25.2m in the same period last year when profitability was hit by restructuring charges.
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The third-quarter profit this year – amouting to $0.38 per share – was achieved in spite of costs related to the recent recall of Peter Pan peanut butter caused by a salmonella outbreak. ConAgra has put the recall costs at $0.06 per share. Quarterly revenues rose by 2% to $2.92bn.
CEO Gary Rodkin viewed the return to profitability as a considerable achievement given the problems created by the product recall. “I congratulate our team on a strong EPS performance, particularly in light of the fact that we were able to offset significant costs associated with the peanut butter recall, and still increase our marketing investment,” Rodkin said. “We clearly are making progress with our ongoing initiatives to reduce operating costs and expand margins, and we are improving execution.”
Rodkin added that given current operating progress and stronger than expected trading profits so far this fiscal year, the company expects EPS to be toward the high end of its forecast range for the full year of $1.28 to $1.33, including the costs of the peanut butter recall but excluding other items impacting comparability.
Third-quarter sales at ConAgra’s Consumer Foods division fell by 2% to $1.6bn, but segment operating profit rose by 2% to $224m on the back of cost savings and changes in product mix.
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By GlobalDataSales at its Food and Ingredients division rose by 8% to $852m, with segment operating profit up by some 36% at $109m. The overall profit increase reflected the strong sales performance, ConAgra said, as well as better mix and successful focus on cost management.
The International Foods division’s sales rose by 3% to $154m, with operating profit reaching $15m, slightly ahead of last year.
