UPDATE 2-ConAgra profit beats with acquisitions' help; shares up

Thu Sep 20, 2012 9:20am EDT

* Quarterly earnings of $0.44 a share before items; Wall St view $0.36

* Raises fiscal 2013 profit view to $2.03-$2.06 a share from $1.95-$1.99

* Shares up nearly 6 percent

By Martinne Geller

Sept 20 (Reuters) - ConAgra Foods Inc reported higher-than-expected quarterly earnings on Thursday, helped by recent acquisitions and increased marketing, and the maker of Chef Boyardee pasta raised its full-year forecast.

Shares of the company, which also makes Hebrew National hot dogs and Banquet frozen meals, rose nearly 6 percent.

Criticized in the past for its large stable of second- and third-tier brands, ConAgra has been acquiring new ones and spending more to promote them. Its marketing investment rose by a double-digit percentage rate in the latest quarter.

The company recently bought the Bertolli and P.F. Chang's Home Menu frozen meals businesses from Unilever, as well as National Pretzel Co, Del Monte Canada, Odom's Tennessee Pride and Kangaroo Brands' pita chip business.

Speculation has surfaced recently over whether ConAgra has a renewed appetite for private-label food maker Ralcorp Holdings , which last year repeatedly rejected the company's takeover bids.

Activist investor Corvex Management called on Ralcorp in August to sell itself, buy another company or change its strategy.

In ConAgra's first quarter, which ended on Aug. 26, net income increased to $250.1 million, or 61 cents per share, from $93.8 million, or 22 cents per share, a year earlier.

Excluding special items, mainly a gain from the change in the market value of derivatives used to hedge commodity costs, earnings were 44 cents per share. On that basis, analysts on average were expecting 36 cents, according to Thomson Reuters I/B/E/S.

Net sales rose 6.7 percent to $3.31 billion. Analysts had expected $3.24 billion.

At the consumer foods segment, the company's largest, sales rose 8 percent as the effects of acquisitions and price increases helped offset a volume decline and a hit from the stronger U.S. dollar.

The commercial foods segment's sales increased 5 percent, helped by a strong performance of the Lamb Weston potato business.

ConAgra said it expected a fiscal 2013 profit of $2.03 to $2.06 per share. Its prior forecast called for growth of 6 percent to 8 percent from the $1.84 per share it earned in 2012, or a range of $1.95 to $1.99.

The company also said cost inflation in its consumer foods business would be slightly lower this year than originally planned, with sales volume in that segment improving throughout the year.

Shares of ConAgra were up 5.9 percent at $27.17 in trading before the market opened.

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