Shares in ConAgra Foods jumped today (27 June) after the US food group booked higher annual sales and profits and lifted its long-term growth targets.
ConAgra booked a 17% rise in underlying diluted earnings per share to US$2.16 for the year to 26 May. The result excluded one-offs like costs related to its acquisition of US private-label group Ralcorp Holdings.
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Net income, operating income and sales all benefited from the Ralcorp deal, although operating income from ConAgra’s legacy consumer foods and commercial foods division was also up.
Sales jumped 15.9% to $15.49bn when the benefit of the acquired Ralcorp assets was included. However, sales from ConAgra’s consumer foods division, which includes brands like Hunt’s ketchup and Orville Redenbacher’s popcorn, grew 8.3%. Revenue from its commercial foods business, which, among other things, supplies fries to foodservice operators, was up 3.5%.
ConAgra provided an earnings per share forecast of $2.40, which Janney Montgomery Scott analyst Jonathan Feeney said was below Wall Street consensus of $2.48.
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However, ConAgra said it expects diluted EPS to grow at least 10% in its 2015-2017 fiscal years as savings from the Ralcorp acquisition flow through to the bottom line.
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By GlobalDataConAgra also set diluted EPS and sales targets for beyond 2017 that were higher than previous forecasts.
The company’s shares had increased 5.67% to $35.24 at 13:15 ET.
Click here for the full statement from ConAgra.
