ConAgra reports better-than-expected profit

Reuters — ConAgra Foods, the maker of Slim Jim beef jerky and Chef Boyardee pasta, reported a higher-than-expected quarterly profit due to cost cuts and the company raised its full-year earnings forecast.

ConAgra, like other processed food companies, has been cutting costs as consumers shift to foods that are perceived as healthier, such as organic products.

Operating profit in the company’s consumer foods business, under which it sells products including Act II popcorn and Bertolli pasta, rose three per cent due to lower advertising costs.

The business accounts for nearly half of ConAgra’s total revenue. Profit in the company’s commercial foods business rose 18 percent.

ConAgra raised its adjusted profit forecast for the year ending May to $2.15-$2.19 per share from $2.13-$2.18 (all figures US$).

The company cut its full-year profit forecast in February, citing weakness in its private-brands business and the labour dispute at U.S. West Coast ports affecting exports of its Lamb Weston potato products.

ConAgra reported a net loss for the third quarter ended Feb. 22 as it took a charge of about $1.3 billion in its private brands business.

ConAgra acquired Ralcorp for $5 billion in 2013 and folded the company into its private brands business.

Sales in the business fell five per cent in the quarter.

ConAgra reported a net loss of $954.1 million, or $2.23 per share, attributable to the company. The company had a profit of $234.3 million, or 55 cents per share, a year earlier.

Excluding items, ConAgra earned 59 cents per share.

Sales fell two per cent to $3.88 billion.

Analysts on an average had expected earnings of 52 cents per share and revenue of $3.87 billion, according to Thomson Reuters I/B/E/S.

Reporting for Reuters by Sruthi Ramakrishnan in Bangalore.

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