The Omaha-based packaged foods company, famous for Chef’s Boyardee pastas, Hunt’s Ketchup, and Hebrew National hot dog – ConAgra Foods – informed that first quarter net income nearly tripled to $484.5 million ($1.12 per share) compared to $147.2 million (34 cents per share) in the same quarter last year.
In its fiscal year, the first quarter ended on August 24th.
“We are pleased with the good start to fiscal 2015, which demonstrates improving fundamentals and better execution. Volume for Consumer Foods is recovering, Lamb Weston’s foodservice channel sales are robust, and cost savings programs across the company are coming in as planned.”
“We remain confident that fiscal 2015 will be a year of stabilization and recovery, and I look forward to updating you on our progress throughout the fiscal year.”
Earnings from operations, excluding special items, were 39 cents per share, compared to analysts’ expectations of 35 cents.
Before markets opened, ConAgra shares were trading 2.8% up at $32.90.
Revenue fell by -0.4% to $3.7 billion, driven by a -1% fall in Consumer Foods sales to $1.6 billion. However, the company stressed that its consumer foods segment is improving rapidly.
In May this year, the company announced that Mr. Rodkin would be retiring at the end of this fiscal year. He has been the company’s CEO since 2005, and has been pressured by shareholders to address the problems that emerged after the company acquired Ralcorp’s private-brand business last year.
After acquiring Ralcorp, ConAgra became America’s largest private-label food business. However, selling food under supermarket brands has been fraught with problems.
ConAgra’s Chairman, Gary Rodkin, retires at the end of this fiscal year.
ConAgra’s Private Brands segment posted a -2% decline in sales to $980 million. Operating profit fell -36% to $42 million. Sales growth for snacks and bars was more than offset by falls in pasta and cereals.
ConAgra, like General Mills and other food companies in the US, says it is concentrating on marketing healthier foods, such as low-fat meals to bolster consumer brand sales.
The company reduced debt by about $500 million in the fiscal first quarter, and forecasts it will reduce total debt by approximately $1 billion in fiscal 2015. It expects to achieve this through a combination of operating cash flow and the proceeds from the sale of Ardent Mills.
Since acquiring Ralcorp, ConAgra Foods says total debt will be $2 billion lower by the end of this fiscal year.
The company forecasts single-digit growth for fiscal year 2015. It predicts a better second half of the fiscal year.
“Comparable EPS for the second quarter of fiscal 2015 is expected to be in line with year-ago amounts given the strong comparable EPS performance in the second quarter of fiscal 2014,” ConAgra wrote.
ConAgra reaffirms its operating cash flow, debt reductions, and dividend guidance.