ConAgra Foods, Inc. (CAG: Quote) on Thursday reported a surge in profit for the first quarter, helped by a benefit as well as higher sales. Adjusted earnings and revenues topped Wall Street view. The company lifted its full year earnings forecast and raised the quarterly dividend. The stock is up over 5 percent in pre-market activity.
Gary Rodkin, ConAgra Foods' CEO, said, "We are very pleased with our strong start to fiscal 2013. Based on continued momentum in our potato operations, effective margin management initiatives across the portfolio, and contribution from acquisitions, we are able to post a strong EPS performance in the midst of difficult marketplace conditions.''
Net income attributable to the company surged to $250.1 million from $93.8 million. Earnings per share climbed to $0.61 from $0.22.
Adjusted for a $0.20 per share net benefit related to unallocated mark-to-market impact of derivatives, among others, earnings were $0.44 per share. In the previous year, adjusted earnings stood at $0.31 per share. On average, 13 analysts polled by Thomson Reuters expected earnings of $0.36 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales climbed 6.7 percent to $3.31 billion from $3.11 billion. Analysts expected revenues of $3.24 billion.
The Consumer Foods Segment sales climbed 8 percent to $2.043 billion, contributing 62 percent of first-quarter sales. ACT II, Lightlife, Marie Callender's, Orville Redenbacher's, PAM, Peter Pan and Reddi-wip saw growth in the quarter.
Sales for the Commercial Foods segment advanced 5 percent to $1.269 billion, due to a strong top-line performance for the Lamb Weston potato operations that posted good volume growth, particularly in international markets, as well as favorable price/mix.
Cost of goods sold slid 2.7 percent to $2.44 billion and interest expense dropped 6.8 percent to $49.3 million.
The board of directors raised the quarterly dividend by $0.01 to $0.25 per share, starting with the dividend to be paid in December. With this change, the annualized dividend becomes $1.00 per share.
Further, the company lifted its adjusted earnings expectations for fiscal 2013 to a range of $2.03 - $2.06 per share, which includes a strong year-over-year increase in marketing investment. Previously, ConAgra's forecast was for adjusted earnings to grow 6-8 percent from $1.84 in fiscal 2012. Wall Street looks for full year earnings of $1.98 per share.
The company noted that the remaining fiscal quarters of fiscal 2013 are expected to show more modest rates of comparable year-over-year earnings growth than in the first quarter, reflecting more difficult comparisons as well as continued increases in marketing investment.
CAG, which closed at $25.65 on Wednesday, is climbing 5.3 percent in pre-market activity at $27.
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by RTT Staff Writer
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