September 18, 2008 / 12:42 PM / 9 years ago

CORRECTED - UPDATE 1-ConAgra profit tops view, but company cuts outlook

(Corrects sales figure in 6th paragraph to $3.07 billion from $3.06 billion)

NEW YORK, Sept 18 (Reuters) - 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 oil.

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 Zimmerman)

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