ConAgra Hikes Dividend, '13 View After 1Q Tops Views

By Matt Egan Features FOXBusiness

(ConAgra Foods)

Food company ConAgra (CAG) beat the Street on Thursday by more than doubling its first-quarter profits amid accelerating sales, prompting the maker of Chef Boyardee and Slim Jim to raise its guidance and boost its quarterly dividend.

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The bullish developments triggered a 5% jump in ConAgra’s share price, putting it on track to post a gain in 2012.

Omaha-based ConAgra said it earned $250.1 million, or 61 cents a share, last quarter, compared with a profit of $93.8 million, or 22 cents a share, a year earlier. On a non-GAAP basis, the maker of Hebrew National hot dogs and Egg Beaters said it earned 44 cents a share, easily surpassing the Street’s view of 36 cents.

Revenue increased 6.7% to $3.31 billion, topping consensus calls from analysts for $3.24 billion.

ConAgra said consumer food sales climbed 8% to $2.04 billion, while commercial food sales gained a more modest 4.6% to $1.27 billion. Gross margins soared to 11.1% from 4.4%.

“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,” CEO Gary Rodkin said in a statement.

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Encouraged by the stronger-than-expected results, ConAgra upgraded its fiscal 2013 non-GAAP EPS view to $2.03 to $2.06. Even the conservative end of the new range would top the Street’s view of $1.98.

The company’s board of directors also gave the green light to plans to hike its quarterly dividend by a penny to 25 cents a share. The new dividend is payable on December 4 to shareholders of record as of October 31.

Shares of ConAgra, which have declined almost 3% so far this year, climbed 5.61% to $27.09 in premarket action on Thursday.