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.
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.
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.
ConAgra 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.