Despite rising costs that sent ConAgra Foods’ (CAG) third-quarter profit down 6.4%, the company still beat Wall Street estimates on improved prices and an uptick in demand within its commercial foods unit.
The year-earlier results benefited from the proceeds of a divested business.
The Omaha, Neb.-based consumer-foods company posted on Thursday net income of $214.8 million, or 50 cents a share, compared with $229.6 million, or 52 cents a share, in the same quarter last year.
Revenue for the maker of foods such as Egg Beaters, Hebrew National, Orville Redenbacher’s, PAM and Reddi-wip was $3.15 billion, up 4.1% from $3 billion a year ago.
Analysts polled by Thomson Reuters expected earnings of 47 cents on revenue of $3.13 billion.
ConAgra Foods CEO Gary Rodkin, said the company was pleased with the quarterly results, despite the dropoff on higher input cost inflation and an overall challenging economic environment. The company was able to achieve comparable earnings per share and segment operating profit growth.
“While inflationary pressures continue to build and difficult conditions persist, we expect our performance to continue to benefit from pricing actions under way, strong supply chain cost savings, and other profit-enhancing initiatives we have previously detailed,” he said.
The company’s consumer foods segment revenue widened 2% to $2.08 billion, a reflection of flat organic volume and improved prices. ConAgra has been raising prices in an effort to mitigate climbing inflation.
Commercial foods gained 7% year-over-year to $1.07 billion on improved prices and volume growth for Lamb Weston specialty potato products.
Despite challenges, the company continues to expect fiscal 2011 earnings to improve at a low-single-digit rate of growth over the comparable $1.74 earned a year ago.