ConAgra profit beats estimates on trading strength

CHICAGO (Reuters) - ConAgra Foods Inc. (CAG.N) posted higher-than-expected quarterly profit on Wednesday as unusual strength in its energy trading and fertilizer operations offset higher marketing and commodity expenses in its core packaged-foods business.

The maker of Swiss Miss cocoa, Healthy Choice meals and Hebrew National hot dogs also forecast profit in line with analysts estimates for the fiscal year that began May 28.

The company posted net income of $192.0 million, or 39 cents a share, for the fourth quarter ended May 27, compared with $59.2 million, or 11 cents, a year earlier.

Income from continuing operations was 38 cents a share, including costs of 2 cents a share related to a recall of Peter Pan peanut butter and a benefit of 1 cent a share from a lower-than-expected tax rate.

Analysts on average forecast 31 cents a share, according to Reuters Estimates.

Sales rose 13.2 percent to $3.33 billion. Analysts on average forecast sales of $2.83 billion, according to Reuters Estimates.

Sales in the consumer foods segment, which represented 54 percent of the company's 2007 business, were about flat at $1.6 billion, due in part to the impact of the Peter Pan recall, which saw the peanut butter pulled from store shelves in February. The company has yet to begin selling Peter Pan again.

Sales in the trading and merchandising segment, which includes energy trading and fertilizer, rose to $659 million from $359 million a year earlier. Profit in that business rose to $200 million, almost 5 times the amount it posted a year earlier.

"The company considers this level of overall segment profitability to be extraordinary," ConAgra said in a news release, adding that it expected fiscal year 2008 profit in the segment to fall from 2007 levels.

The company also said that analysts estimates for fiscal 2008 earnings in the range of $1.48 a share, excluding one-time items, were "appropriate."

ConAgra shares traded at $26.00 on Wednesday in pre-market electronic trading, up from Tuesday's $25.56 close on the New York Stock Exchange.