OMAHA — Higher prices and better margins helped drive a 26% increase in earnings at ConAgra Foods, Inc. during the third quarter. Net income in the quarter ended Feb. 26 was $271.6 million, equal to 66c per share on the common stock, up from $214.8 million, or 50c per share, in the same period a year ago. Sales for the quarter were $3,373.1 million, up 7% from $3,141.3 million during the same quarter of the previous year.
“Conditions have been difficult across the industry due to high inflation and soft volumes for retail consumer food brands,” said Gary Rodkin, chief executive officer. “Our Lamb Weston potato business performed well, and we benefited from total margin management efforts that include price increases in both operating segment and good overall cost savings. We remain committed to our e.p.s. goals for fiscal 2012, and we will continue our focus on deploying cash in ways that create long-term value.”
The Consumer Foods segment had operating profit of $331.3 million in the third quarter, up 20% from $276 million during the same quarter of the previous year. Sales in the segment were $2,157.2 million, up 4% from $2,072.2 million.
ConAgra said the sales increase reflected growth from several brands, including ACT II, Chef Boyardee, David, Marie Callender’s, Orville Redenbacher’s, Pam, Peter Pan, Reddi-wip, Slim Jim and Wesson. Sales also included contributions from the recently acquired National Pretzel Co., as well as from Agro Tech Foods, Ltd. of India.
The Commercial Foods segment posted operating profit of $150 million, up 7% from $140.6 million during the same quarter of the previous year.
“Lamb Weston improved profit performance through pricing actions, volume growth, and productivity gains, which collectively offset a profit decline in the milling operations,” ConAgra said. “The profit decline for the milling operations was driven by a difficult comparison given a very strong performance in the year-ago period, as well as less favorable market conditions. Improved mix, notably through sales growth for sweet potatoes and whole grains, favorably impacted segment results.”
The segment had sales of $1,215.9 million, up 14% from $1,069.1 million. ConAgra said the sales growth reflected the benefit of commodity-driven price increases and increased volumes for the Lamb Weston potato operations, as well as the pass-through of higher wheat costs in milling operations.
For the nine months ended Feb. 26, ConAgra posted net income of $528.7 million, or $1.28 per share, down 6% from $562.1 million, or $1.29 per share, in the same period a year ago. Net sales, meanwhile, rose 8% to $9,849 million from $9,093.1 million.
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