ConAgra results beat Wall Street's expectations
ConAgra Foods Inc
The maker of Healthy Choice frozen meals and Slim Jim meat snacks said on Thursday that its profit fell to $215.1 million, or 50 cents per share, in the third quarter ended on February 27 from $228.7 million, or 51 cents per share, a year earlier.
Analysts on average were expecting earnings of 46 cents per share, according to Thomson Reuters I/B/E/S.
Sales rose 4.1 percent to $3.15 billion, above analysts' expectations of $3.12 billion.
The company forecast a dip in fourth-quarter earnings per share from the third quarter, partly because of accelerating inflation. That would put earnings below the analysts' average estimate of 51 cents a share.
Food companies like ConAgra are struggling with increases in the cost of commodities such as gas, dairy and wheat, said Morningstar analyst Erin Lash.
In February, the company cut its longer-term earnings target due to the weak economy. That forecast calls for growth of 6 percent to 8 percent, down from a prior view of 8 percent to 10 percent.
ConAgra competes with the private-label products consumers have turned to in order to cut their own costs during the recession and its aftermath. Shoppers have remained wary about spending due to anemic wage growth and stubbornly high unemployment levels, Lash said.
ConAgra's shares were up 0.6 percent at $23.06 in morning trading on the New York Stock Exchange.
(Reporting by Helen Chernikoff; Editing by Lisa Von Ahn and Maureen Bavdek)
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