ConAgra (CAG) revealed stronger third-quarter earnings on Thursday that beat Wall Street expectations, and backed its fiscal year forecast.
The industry has faced a turbulent few months as costs for raw materials and inflation continued to rise and softer demand hurt volumes. But the maker of Chef Boyardee and Hebrew National hot dogs said its commercial unit grew 14% during the quarter on pricing adjustments that offset inflation.
Stronger demand for potatoes attributed to sales growth of 4%.
“Our Lamb Weston potato business performed well, and we benefited from total margin management efforts that include price increases in both operating segments and good overall cost savings,” ConAgra CEO Gary Rodkin said in a statement.
The Omaha, Neb.-based packaged foods manufacturer reported net income of $272 million, or 51 cents a share, compared with a year-earlier $215 million, or 50 cents.
Excluding one-time items, the company earned 65 cents, topping average estimates of 49 cents in a Thomson Reuters poll.
Revenue for the three-months ended Feb. 26 was $3.37 billion, up 7.4% from $3.14 billion a year ago, edging ahead of the $3.35 billion predicted by analysts.
Looking ahead, ConAgra said it continues to expect fiscal 2012 earnings per share growth in the mid-single-digit rate from the $1.75 it earned last year.