ConAgra (CAG) quarterly profit surges 60% on strong sales

Posted Mar 27th 2008 10:22AM by Eliza Popescu
Filed under: Earnings Reports, Forecasts, Consumer Experience, ConAgra Foods (CAG)

Shares of food maker ConAgra Foods Inc. (NYSE: CAG) have been soaring in early trading more than 9% after reporting this morning a surge of 60% in its third quarter profit.

The company said its quarterly profit climbed to $309 million, or 63 cents per share due to higher prices and demand for its products. These numbers are up from $193 million, or 38 cents per share reported in the same period a year ago when the company's earnings numbers were dragged down by recall costs. Analysts, on average, expected quarterly earnings of 39 cents per share.

ConAgra's quarterly revenue grew to $3.53 billion, up from $2.9 billion a year ago. Revenue during the period was helped by strong gains from the company's food and ingredients segment which offset soaring commodity costs. Analysts expected the company show sales of $3.17 billion in the third quarter, according to Thomson Financial.

ConAgra also announced it would sell the trading and merchandising business to the Ospraie Special Opportunities fund for $2.1 billion. This move is designed to help the company to focus on its core consumer foods business and to repurchase ConAgra shares.

Looking ahead, the company showed confidence over its further earnings and lifted its fiscal 2008 earnings outlook. ConAgra now expects 2008 earnings between $1.80 and $1.85 per share, compared with its prior forecast for a profit of $1.55 per share. Analysts predicted 2088 earnings of $1.60 per share.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

Tags: cag, ConAgra Foods, ConagraFoods, earnings, forecast, inthenews, Ospraie Special Opportunities, OspraieSpecialOpportunities