OMAHA, Neb. (AP) — ConAgra Foods Inc.'s fiscal third-quarter net income fell 6 percent as the maker of Healthy Choice and Chef Boyardee dealt with rising costs.
In December ConAgra said it was raising prices. The company, based in Omaha, Neb., initially benefited from the economic downturn because people ate at home more. But higher ingredient costs and a competitive selling environment have started to pressure the food maker and others.
ConAgra on Thursday reported net income of $214.8 million, or 50 cents per share, for the period ended Feb. 27. That's down from $229.6 million, or 51 cents per share, a year earlier.
Earnings from continuing operations rose to 50 cents per share from 49 cents per share.
The results beat the forecast of analysts surveyed by FactSet, who were looking for 46 cents per share.
ConAgra's stock gained a penny to $22.94 in premarket trading.
"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," CEO Gary Rodkin said in a statement.
Revenue climbed 4 percent to $3.15 billion, surpassing Wall Street's $3.12 billion.
Revenue for the consumer foods division, two-thirds of ConAgra's business, climbed to $2.08 billion from $2.03 billion.
Among ConAgra's strongest-performing brands were Banquet, Peter Pan, Healthy Choice, Hebrew National and Slim Jim. ConAgra said price increases should become more apparent in the current quarter's results.
The commercial foods unit reported its revenue rose to $1.07 billion from $996.1 million, helped by higher selling prices in its flour milling operations. The segment also benefited from volume growth for its Lamb Weston specialty potato products.
The division comprises 34 percent of ConAgra's total third-quarter revenue.
For the full year, ConAgra still expects a low single-digit percentage rate increase from its year-ago results of $1.74 per share.
Analysts predict full-year earnings of $1.75 per share.
While ConAgra expects its fourth-quarter earnings per share to improve from last year, the food maker said the quarter will likely come in below its third-quarter performance, mostly because of accelerating inflation and higher-than-expected third-quarter flour milling profits.