ConAgra Foods posted higher quarterly profit on Thursday as sales of new products and results in its energy trading and fertilizer business helped offset the impact of soaring commodity costs.
The company also stood by its full-year earnings forecast and said that earnings per share for the current second quarter would be roughly in line with year-earlier results, excluding one-time items.
Like most food companies, ConAgra has also faced rising costs for ingredient costs for a host of items. But profit from the energy trading business -- a vestige of ConAgra's history as more of a commodities-based business -- has helped offset the impact of the cost of commodities in the food business.
The maker of Healthy Choice frozen dinners, Hebrew National hot dogs and Peter Pan peanut butter said profit was $175.4 million, or 36 cents a share, in the fiscal first quarter ended Aug. 26, compared with $166.7 million, or 33 cents a share, a year earlier.
Excluding one-time items, earnings per share from continuing operations were 34 cents. Analysts on average forecast 29 cents, according to Reuters Estimates. Sales rose 10% to $2.96 billion.
ConAgra has undergone a restructuring to cut costs and shed non-core brands and commodity businesses, focusing its efforts on developing new products like Healthy Choice Cafe Steamers and panini and Chef Boyardee macaroni and cheese. The company has also spent more on marketing to help boost sales.
In August, ConAgra also relaunched its Peter Pan peanut butter, which had been pulled from store shelves in February due to salmonella contamination. The company said on Thursday that it expects to gradually recover a "meaningful portion" of the business that existed prior to the recall.
For all of 2008, ConAgra stood by its forecast of earnings per share of $1.48 a share, excluding one-time items. Analysts on average forecast $1.50 a share.
For the second quarter, the company said the timing of price increases, inflation and cost cutting initiatives, as well as expectations that profits from the trading and merchandising business would slow down, will lead to earnings per share roughly in line with a year earlier.
ConAgra earnings per share were 40 cents, before one-time items, a year earlier. In the current quarter, analysts forecast 44 cents a share, according to Reuters Estimates.