Costs related to ConAgra Foods’ acquisition of US peer Ralcorp Holdings hit its bottom line in the third quarter of its financial year – although the company insisted underlying profits were up.
ConAgra’s third quarter net profit was down 56%, dropping to US$123.4m, the company revealed today (3 April). The bottom line was hit by expenses associated with the group’s acquisition of Ralcorp, which the company maintained would be accretive to earnings during this financial year.
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During the quarter, which ran until 24 February, operating profit fell to US$284m, down from $331m in the comparable period of last year. This included a $5m contribution from Ralcorp. However, stripping out a benefit last year from the Agro Tech Foods transaction, ConAgra emphasised adjusted operating profit was up 3%.
In the first nine months of the year, ConAgra booked a 7.9% increase in operating profit to $1.28bn. Net income was up 6.1% at $592.1m.
Sales increased to $10.98bn from $9.93bn in the year-to-date. The near 10% gain was aided by improved volumes, as the company lapped year-ago price hikes, and the contribution from acquisitions. ConAgra has also ramped up significantly its investment in marketing behind its consumer brands.
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Looking to the full year, ConAgra said it expected adjusted EPS to rise 17%.
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