OMAHA — Net income at ConAgra Foods, Inc. in the first quarter ended Aug. 30 fell 63% to $165.9 million, equal to 37c per share on the common stock, down from $442.4 million, or 95c per share, in the same period a year ago. Last year’s results included a $334.8 million gain from the sale of the company’s trading and merchandising operations. Excluding the gain, income from continuing operations rose 55% to $166.5 million, up from $107.6 million in the first quarter of fiscal 2009.
Sales for the quarter were $2,961.4 million, down 3% from $3,056.5 million during the same quarter of the previous year.
ConAgra said its 2010 adjusted earnings from continuing operations should approach $1.70 per share, up from earlier forecasts of $1.63 to $1.66 per share.
"We are off to a strong start in fiscal 2010," said Gary Rodkin, chief executive officer. "The Consumer Foods segment posted significantly improved operating profits, along with good sales trends across the consumer branded portfolio, and we expect the balance of the year to show strong profits for this segment due to manageable inflation, good cost savings, sales growth, and favorable mix. Our Commercial Foods segment is poised for a solid profit performance in line with our expectations, and we are confident we will deliver our raised e.p.s. guidance for this fiscal year."
The Consumer Foods segment had an operating profit of $249.9 million, up 34% from $186.3 million during the same quarter of the previous year. Sales for the segment were $1,860.1 million, up 1% from $1,849.3 million during the same quarter of the previous year. ConAgra said sales incurred a 2% negative impact from lower sales of Slim Jim products, resulting from the June 9 plant accident at Garner, N.C.
ConAgra said Slim Jim production volume and service levels are in the process of being restored. In total, the company estimated that the Consumer Foods operating profit was affected negatively by approximately $10 million due to lower Slim Jim volumes during the first quarter.
"A substantial portion of this amount, as well as any additional foregone operating profit in the remaining quarters this fiscal year, is expected to be reimbursed to the company later in the fiscal year as part of its business interruption insurance coverage," ConAgra said.
In the Commercial Foods segment, operating profit was $140.8 million, up 5% from $133.9 million during the same quarter of the previous year. Despite a difficult restaurant environment that negatively impacted volumes for Lamb Weston specialty potato products, ConAgra said those operations posted a slight improvement in sales and profits due to the impact of an acquisition, improved mix, pricing and operating efficiencies. Flour milling profitability also increased, reflecting modest profits in the year-ago period.
Sales in the Commercial Foods segment were $1,101.3 million, down 9% from $1,207.2 million during the same quarter of the previous year. The decline reflected lower flour prices resulting from lower underlying wheat costs, according to ConAgra.