ConAgra Foods reported a sharp drop in third-quarter profit, mainly due to costs related to its Ralcorp acquisition, but the maker of Chef Boyardee pastas and Hunt's ketchup maintained its forecast for full-year adjusted profit.
Following the report, ConAgra stock ticked lower in trade on Wednesday. (Click here to track the U.S. stock market's reaction to the earnings release.)
ConAgra closed its $5 billion acquisition of Ralcorp in January, making it the leading U.S. manufacturer of store-branded foods.
Net profit fell to $120 million, or 29 cents per share, in the quarter ended Feb. 24, from $280.1 million, or 68 cents per share, a year earlier.
Acquisition-related costs hurt quarterly earnings by 16 cents per share, the company said.
On an adjusted basis, ConAgra earned 55 cents per share, just shy of the average analyst estimate of 56 cents. But the company maintained its full-year earnings forecast of at least $2.15 per share.
Ralcorp, which contributed 27 days of sales and earnings to the third quarter, is expected to add 5 cents per share to ConAgra's adjusted fiscal 2013 profit.
Third-quarter sales rose 13 percent to $3.85 billion, with Ralcorp contributing $292 million in sales and 5 million in operating profit.
Analysts on average had expected total revenue of $3.87 billion, according to Thomson Reuters I/B/E/S.
Sales in its consumer business, which include brands include brands such as Act II, Hebrew National, Marie Callender's and Orville Redenbacher's, rose 7 percent but volumes, excluding acquisitions, declined 3 percent.
However, ConAgra said it expects sequential improvements in volumes in the fourth quarter as consumers get more accustomed to the significant price increases implemented last year.
ConAgra also expects a recent flour-milling deal to contribute less than 5 cents to fiscal 2014 adjusted earnings per share.
The company said in March it would merge its flour-milling operations with those of Cargill and CHS, to create a U.S. flour-milling giant that will also have a strong foothold in Canada and Puerto Rico.