Yesterday, ConAgra Foods Inc. (CAG) posted earnings of $239 million, or 54 cents a share compared to the year-ago period with profits of $168.5 million, or 37 cents a share. This represents a 43 percent gain due largely to lower commodities costs and increased market share across all of its consumer foods businesses. ConAgra manufactures Chef Boyardee pasta, Hunt’s tomato-based products, Peter Pan peanut butter, Slim Jim meat sticks, and Wesson oils.
Analysts were expecting 47 cents per share in profits.
The company also lifted its full-year outlook to $1.73 a share from $1.70.
Revenue declined by 2.4 percent to $3.17 billion, due largely to an 11 percent fall in the sale of commercial-foods. ConAgra’s consumer segment revenue rose 3 percent to $2.1 billion for the quarter.
ConAgra and other packaged food makers have benefited from consumers preferences for eating at home during the economic downturn.
Chief Executive Gary Rodkin stated in the earnings release, “Success with innovation and marketing drove significantly improved market shares and top-line progress in the consumer foods segment for the quarter, while a more favorable input cost environment and strong cost savings substantially contributed to profit growth.“
Today, analysts at UBS raised its earnings estimates for ConAgra through 2011, citing strong frozen food sales and increased production of Slim Jim snacks on the heels of a plant closure this year. UBS rates ConAgra as a "Buy" and upped the price target to $26 per share.
Conagra is a solid dividend payer as well. The company pays a 3.6 percent annualized dividend.
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