OMAHA, Neb. (AP) -- Strong sales of low-priced meals such as Banquet and Chef Boyardee and lower costs pushed ConAgra Foods Inc.'s third-quarter profit up 19 percent.
Cheap prepared foods like those that ConAgra offers have appealed to customers during the recession as they look for ways to save money and eat at home more.
Its stock dipped 9 cents to $26.01 in premarket trading.
The packaged foods maker based in Omaha, Neb. also maintained its full-year adjusted earnings guidance on Thursday, but it's slightly below Wall Street's forecast.
ConAgra's earnings climbed to $229.6 million, or 51 cents per share, for the period ended Feb. 28. That's an increase from $193.2 million, or 43 cents per share, a year earlier.
Removing one-time items such as a 2 cents-per-share gain related to the sale of its Luck's brand, profit was 44 cents per share, meeting the expectations of analysts polled by Thomson Reuters. Analysts' estimates typically exclude one-time items.
Revenue dipped 1 percent to $3.1 billion. Wall Street expected $3.15 billion.
Revenue from the consumer foods division, which makes up two-thirds of ConAgra's business, grew 2 percent, with unit volumes up 3 percent. Among the strongest performers were Banquet, Chef Boyardee, Hunt's, Marie Callender's and Pam products.
Results were not as good at the commercial foods segment, which reported a 6 percent revenue decline. The unit, which comprises 35 percent of year-to-date sales, said the revenue drop-off was due to lower flour milling revenue resulting from passing through lower wheat costs to shoppers.
Like many businesses maneuvering through the stagnant economy, ConAgra has looked to reduce its costs. During the quarter, the company trimmed costs of goods sold by 3 percent to $2.31 billion and cut its selling, general and administrative expenses slightly to $421.9 million. Interest expense fell 5 percent to $39.9 million.
ConAgra, whose other brands include Peter Pan and Reddi-wip, said it is still on track for fiscal 2010 adjusted earnings to approach $1.73 per share. But analysts are looking for a slightly higher profit of $1.75 per share for the year.