(Corrects sales figure in 6th paragraph to $3.07 billion from
NEW YORK, Sept 18 ConAgra Foods Inc (CAG.N)
posted a higher-than-expected quarterly profit on Thursday, but
cut its full-year outlook, citing inflation and higher
investments for some of its brands.
Net income rose to $442.4 million, or 94 cents per share,
in the first quarter ended on Aug. 24 from $175.4 million, or
36 cents per share, a year earlier.
The results included a gain from divesting the trading and
merchandising unit earlier this year and charges for hedging.
Excluding those and other items, ConAgra earned 27 cents a
share, topping the analysts' average forecast of 24 cents,
according to Reuters Estimates.
Earlier this month, ConAgra warned that first-quarter
profit would miss its forecast of 26 cents to 28 cents a share
because of rising costs for commodities like corn and crude
Sales rose 17 percent to $3.07 billion.
ConAgra divested its trading and merchandising unit to
focus on its main consumer foods business. Analysts at the time
said it was the right move since the company sold the business
while it was showing strength and could command a better price.
But the unit had also helped lift profits while the
consumer food business struggled.
Food companies of all sizes have been hit by rising costs
for oil, wheat and other commodities. ConAgra, like others, has
raised prices to help offset those costs, although the company
concedes it was a bit late in taking those increases.
Analysts have questioned whether ConAgra's brands, many of
which are not the leaders in their categories, can support the
price increases without consumers seeking out cheaper options.
For fiscal 2009, ConAgra said it expected to earn a little
more than $1.50 per share from continuing operations, down from
its prior outlook of $1.56 to $1.59.
(Reporting by Aarthi Sivaraman; Editing by Lisa Von Ahn, Dave