ConAgra Foods (NYSE: CAG) issued Q1 numbers on Tuesday. The market wasn't too impressed by them, but they weren't bad, actually. Net sales were lackluster, I'll admit. They dropped about 3%. Earnings per share from continuing operations, on the other hand, really shined. They increased well over 60% to 38 cents. Net income from continuing operations on a dollar basis soared over 50%.

Even better, that 38-cents-per-share statistic was firmly ahead of Wall Street expectations. According to our earnings preview, analysts were looking for 34 cents per share.

Analyst upgrades:

• JP Morgan upgraded J.C. Penney (NYSE: JCP) to Neutral from Underweight based on lower input costs, stabilization in home, lower markdown dollars, and valuation.
• Oppenheimer upgraded Novellus (NASDAQ: NVLS) to Perform from Underperform as it believes Novellus' market share has stabilized and that the company is a potential acquisition target. The firm raised its price target to $20 from $9.
• Bernstein upgraded ConAgra (NYSE: CAG) to Market Perform from Underperform citing strength in grains and moderating input costs.
• ConocoPhillips (NYSE: COP) was raised to Buy from Neutral at Goldman.
• China Housing (NASDAQ: CHLN) was upgraded to Buy from Hold at Roth Capital.

Supermarket staple ConAgra Foods (NYSE: CAG) reported earnings for the third quarter on Thursday. Wall Street was bullish on the company since the bottom-line performance beat the expectations of analysts. Shares of the stock closed up over 9% at the end of yesterday's trading session.

Sales increased slightly over 6% and net income came in at 40 cents per diluted share on an adjusted basis. That was good for an 18% growth rate on the bottom line. Market analysts were only counting on 36 cents per share. So, you can see why the market was excited.

Kraft (NYSE: KFT), whose supermarket colleagues include Kellogg (NYSE: K) and General Mills (NYSE: GIS), will be reporting Q4 results tomorrow. Analysts expect the foodstuffs company to report $0.44 per share. Unfortunately, Kraft did $0.44 per share in the year-ago period. So the market doesn't think Kraft will grow the bottom line.

Perhaps that will work in Kraft's favor. With expectations so low, management has the opportunity to surprise to the upside. The company has a decent record in beating Wall Street expectations. Kraft certainly has brands that people like. However, things are becoming more difficult for the consumer. Layoffs are everywhere, and job security has taken a sabbatical. Kraft needs to convince people to pay extra for a package of Kraft-branded cheese or a box of Nabisco Ritz crackers when there are less-expensive generic substitutes available.

Ivanka Trump -- the Prada-wearing daughter of real estate mogul turned motivational speaker Donald Trump -- is moving downmarket. ConAgra Foods (NYSE: CAG) announced yesterday that it its Healthy Choice brand is "partnering with Ivanka Trump , successful New York businesswoman, to change the way people think about eating lunch at work."

Yesterday afternoon, thousands of office workers gathered outside midtown Manhattan's Grace building to meet Ivanka Trump and test out Healthy Choice's new Fresh Mixers line of prepared meals. According to the company, fresh mixers are currently available in Sweet & Sour Chicken, Sesame Teriyaki Chicken, Ziti & Meat Sauce, Rotini & Zesty Marinara Sauce, Southwestern Style Chicken and Szechwan Beef with Asian Style Noodles.

Unfortunately at $3.49 per piece, they're probably out of the league of many of the financial district's top executives, newly impoverished by the collapse of the financial markets.

"I'm excited to be partnering with Healthy Choice on the launch of Healthy Choice Fresh Mixers because I know how difficult it can be to try to find a healthy lunch during a hectic day," said Ivanka Trump . "Healthy Choice Fresh Mixers are convenient, fresh-tasting and easy to store in my desk drawer so I never have to skip lunch."

Why do I seriously doubt that Ms. Trump will actually eat these things at anything other than promotional events? (If you feel like reading Ivanka's blog about lunch, click here.)

Hormel Foods (NYSE: HRL), a foodstuffs processor whose colleagues include ConAgra Foods (NYSE: CAG) and Kraft (NYSE: KFT), issued its Q2 numbers on Thursday. Revenues jumped 6% to $1.6 billion, although the growth rate was only 4% if you look at just the amount credited to organic appreciation. Net earnings per diluted share rose 14% to $0.56 per share. Volume jumped 5% altogether, and 3% based on, once again, organic growth.

This wasn't a bad earnings report for a major supermarket brand, although it certainly wasn't overly stimulating, either. So, you wanna take a guess as to by how much Hormel beat earnings expectations? If you said "by the proverbial penny," then you just might be a Wall Street junkie! Seems like so many companies got the penny-thing down pat. Anyway, Briefing.com not only said that earnings were better by a penny, but that revenues came in pretty much as expected.

Basically, Hormel is trying to navigate this inflationary environment as best it can. As we all know, it's pretty competitive out there in the grocery aisles even during prosperous periods. But take a look at the cash-flow statement and you'll see that the company did pretty well in terms of net cash from operations. That metric soared almost 30% over the six-month period. Only problem is, not too much was left over after capital expenditures and dividend payments were taken into account. Still, Hormel seems reasonably fine for now on the cash-flow front.

I'm not necessarily interested in Hormel's stock at this time. If I wanted to get in, I certainly would look to pick up shares at a higher yield; there are better opportunities out there for dividend yield, in my opinion. As Joseph Lazzaro observed a couple months back, Hormel is definitely an interesting defensive name during challenging economic times, and I did enjoy the double-digit bottom-line growth. I just think investors would be better off if this one came down a bit in terms of share price.

Disclosure: I don't own shares in any company mentioned here; positions can change at any time.

ConAgra Foods (NYSE: CAG) is a top food producer, offering packaged and frozen foods, seafood and dairy products to retail, foodservice, commercial product and international customers. Among the company's many brands are Hunt's, Banquet, Chef Boyardee, Van Camp's, Healthy Choice, Orville Redenbacher's, PAM, Slim Jim and Wesson. Major competitors include Kraft Foods (NYSE: KFT) and Unilever (NYSE: UL).

The company pleased investors late last month, when it reported Q3 EPS of 63 cents and revenues of $3.53 billion. Analysts had been expecting 41 cents and $3.20 billion. Management also guided FY08 EPS to $1.80-$1.85 ($1.60 consensus) and announced that it would sell the company's trading and merchandising arm to the Ospraie Special Opportunities fund and others for $2.1 billion.

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 Foods, Inc. (NYSE: CAG) shares are trading higher today after the company raised its outlook for Q2 earnings (expected 12/20) due to strong performance in trading and merchandising. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAG.

After hitting a one-year high of $28.35 last December, the stock hit a one-year low of $22.81 in November. CAG opened this morning at $24.90. So far today the stock has hit a low of $24.86 and a high of $25.61. As of 11:20, CAG is trading at $25.56, up $1.17 (4.8%). The chart for CAG looks bearish but improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $22.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 6.4% return in just 4 months as long as CAG is above $22.50 at March expiration. ConAgra would have to fall by more than 15% before we would start to lose money.
CAG hasn't been below $22.50 at all in the past year and has shown support around $23 recently. This trade could be protected by strong support around $23 where the stock bottomed in early November.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CAG.

ConAgra Foods (NYSE:CAG) has announced a massive recall of all varieties of Banquet brand frozen pot pies as well as store brand frozen pot pies sold by Albertson's, Hill Country Fare, Food Lion, Great Value, Kirkwood, Kroger, Meijer and Western Family.The move comes in response to information ConAgra received from state health officials suggesting some of the products may carry the salmonella bacteria. The company has halted pot pie operations at its Marshall, MO. plant while investigations continue to find the source of the contaminant. The store brands recalled include

• Albertson's (sold at Albertson's);
• Hill Country Fare (sold at HEB);
• Food Lion (sold at Food Lion);
• Great Value (sold at Wal-Mart);
• Kirkwood (sold at Aldi);
• Kroger (sold at Kroger);
• Meijer (sold at Meijer);
• Western Family (now discontinued; previously sold at a variety of small retailers).
  

The company, in cooperation with the USDA, on Tuesday ordered stores to pull the products from their shelves. For a refund, Customers may discard the contents and send the side panel of the package that contains the UPC code to ConAgra Foods, Dept. BQPP, P.O. Box 3768, Omaha, NE 68103-0768. You can also return the product to the store from which it was purchased for a refund.

A nationwide recall of hot-dog chili sauces due to possible botulism bacteria contamination began last Thursday and became larger this past weekend. "Great Value" private-label cans of chili sauce from retailer Wal-Mart Stores Inc. (NYSE: WMT) have been recently also added to the recall list. Other brands on the list include Castleberry's and Austex Hot Dog Chili Sauce.

Here is where things get a little dicey, and probably will continue to do so in the future. If you remember, peanut butter from ConAgra Foods Inc. (NYSE: CAG) was recalled last fall, leaving the Peter Pan brand absent from many grocers' shelves. Now, the chili sauce recall hit the market and it seems that Wal-Mart's private labels aren't immune this time either.

This is not surprising since probably all of Wal-Mart's private-label grocery items are made by the bigger manufacturers. In some cases, the ingredient mix and breakdown is slightly different from the brand names so they don't look and taste exactly like the private-label brands such as Sam's Choice and Great Value.

The question is then, why is it that I rarely see the private-label brands referenced right at the start with the name brands when food recalls happen? Just like with the Peter Pan peanut butter recall months ago, this chili sauce recall did not include Wal-Mart's private-label brands until after the recall was firmly and publicly established. Seeing as Wal-Mart is the nation's largest food retailer, one would think getting recall notices out covering its private-label brands would be first order.

There is an Omaha company that, quite simply, makes some of the most recognizable food brands in the world. Perhaps that is not too surprising; they have been at it since 1919.

ConAgra Foods (NYSE: CAG) offers packaged and frozen foods, seafood and dairy products to retail, foodservice, commercial product and international customers. Among the company's many brands are Hunt's, Banquet, Chef Boyardee, Van Camp's, Healthy Choice, Orville Redenbacher's, PAM, Slim Jim and Wesson. Major competitors include Kraft Foods (NYSE: KFT) and Unilever (NYSE: UL).

The company pleased investors late last month, when it reported Q4 EPS of 39 cents and revenues of $3.33 billion. Analysts had been expecting 31 cents and $2.83 billion. The CEO attributed success to record trading and merchandising profits, continued progress with cost-saving initiatives, and accelerating sales performance for key brands within the Consumer Foods segment. Management also guided FY08 EPS to $1.48, a figure in-line with the average Street estimate.

Peanut butter manufactured under the "Peter Pan" and "Great Value" brands with the product code 2111 by ConAgra Foods (NYSE: CAG) is still making people sick, according to the latest report by the Centers for Disease Control. Although the entire batch of tainted peanut butter has long been pulled from store shelves, it's difficult to remove from consumer's shelves (especially as the two-dollar refund isn't exactly a money-maker). And processed peanut butter (as we well know) seems to last forever; I wouldn't be surprised if first-graders are still toting contaminated sandwiches to school in their lunchboxes next fall.

So as my college track buddy Josephine always said around October when the sniffles would break out around the locker room, "sickness is coming." Sickness is still coming, and likely will continue for some time; 628 cases in a whopping 47 of our 50 U.S. states have been reported, with more than 200 new since March when the CDC last reported (the peanut butter recall was announced in mid-February 2007).

ConAgra won't be producing peanut butter from its Sylvester, Ga. plant again for a while, as renovations to fix the moisture problems blamed for the contamination are still underway; but the company will reintroduce its Peter Pan brand in July. But with customers still sickening, will anyone go back? Would you eat Peter Pan peanut butter again?

While preschool was difficult for my son, who just doesn't like playing according to a schedule, I can gratefully point to one rule I needed help reinforcing: washing his hands. Like all the rest of the kids, he was required to wash hands after going to the potty and before eating snacks.

Clearly, the food workers of America did not learn this lesson.

Salmonella can infect a food in two ways: (1) if the raw meat or uncooked eggs from an infected chicken or other animal is ingested (either by eating raw food or by contaminating other foods with chicken juices, etc.) or (2) a human's feces come into contact with food. Because someone didn't wash his hands after using the potty. The CDC says the source of contamination is "still under investigation," but as this is the first-ever peanut butter contamination I'm just going to go out on a limb and say "human feces."

Peter Pan and Great Value peanut butter products (starting with code 2111) have been recalled by ConAgra Foods, Inc. (NYSE:CAG), thanks to a salmonella outbreak. I'm sure the parents who just sent their children to school with peanut butter and jelly sandwiches told them to wash their hands before lunch.

It's not like this is the first time this has happened, even in the past few months.