Food company ConAgra (NYSE: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.
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.