ConAgra (CAG) reported stronger-than-expected second-quarter profit and sales on Thursday, led by sharply higher demand in its consumer foods category and tighter spending.
The company also raised its full-year forecast, now anticipating fiscal 2013 EPS of at least $2.06, up from an earlier guidance of $2.03 to $2.06 a share. The consensus is calling for slightly higher earnings of $2.07.
The Omaha, Neb.-based packaged food giant posted operating profit of $455.3 million, up 9.2% from $417.1 million last year. Excluding one-time items, ConAgra earned 57 cents a share, topping average analyst estimates in a Thomson Reuters poll by two pennies.
“We are pleased that both of our segments posted operating profit growth in the midst of current economic conditions,” ConAgra CEO Gary Rodkin said in a statement.
Revenue for the three months ended Nov. 25 climbed nearly 9% to $3.74 billion from $3.4 billion a year ago, trumping the Street’s $3.69 billion. Acquisitions helped drive sales higher during the period, and ConAgra said its planned $5 billion acquisition of Ralcorp is on track to close in the first quarter of calendar year 2013.
Both the consumer and commercial foods segment performed well during the quarter, with consumer’s sales growing 11% to $2.42 billion, led by strong sales of Hebrew National, Orville Redenbacher’s and Reddi-wip. Commercial sales ticked up about 5% to $1.3 billion.
“Effective margin management initiatives, moderating input cost inflation, the benefit of acquisitions, and good results from our potato operations are collectively driving high-quality EPS growth,” Rodkin said.