December 26, 2007

ConAgra Foods posts 15-percent increase in net income

US food giant ConAgra Foods, Inc. posted net income of US$$244.8 million in the second quarter ended Nov. 25 , up 15 percent from the US$213.3 million seen the same quarter last year.

Sales of US$3.5 billion was up 14 percent from $3.09 billion during the same quarter of the previous year.

The company's second quarter results were impacted by the recall of its pot pies due to Salmonella concerns, which cost the company US$$27 million in the second quarter.

Despite a "challenging input cost environment" the company expects full-year fiscal 2008 earnings per share to be higher than previously expected due to strong performance in the Trading and Merchandising segment, a likely continuation of inflation and price increases in the Consumer Foods segment.

Although operating profit for the company's consumer foods segment was down 16 percent from US$277.3 million the previous year's second quarter to US$234 million this year, sales was up 2 percent from US$1.766 million to US$1.795 billion.

Food and Ingredients sales segment was up 14 percent to US$995 million, with operating profit up 12.5 percent to US$131.3 million.

The company's trading and merchandising segment did exceptionally well, with a four-fold increase in operating profit, which jumped from US$38.9 million the second quarter last year to US$164.5 million this year. Sales were up 84 percent to US$545.5 million

The company's International Foods segment however, was disappointing. Operating profit was down 21 percent to US$14.7 million from US$18.6 million the previous year despite a 13-percent increase in sales to US$175.7 million. 

"Although sales and profits for our Consumer Foods segment are not as strong as they should be, I am encouraged by continuing progress for a number of Consumer Foods brands as well as the results of innovation and marketing efforts underway," Rodkin said. "We expect profits and margins for this segment to improve toward the end of this fiscal year."

For the six months ended Nov. 25, ConAgra posted net income of $420,200,000, up 11 percent from the same period of the previous year.