Despite ongoing costs of recalling its Peter Pan peanut butter, ConAgra Foodsreported its fourth-quarter profit soared Wednesday compared with results weighed down by restructuring charges a year ago.
Its shares rose nearly 3 pecent in morning trading.
The food company said a strong quarter from its commodities trading division helped it post a profit of $192 million, or 39 cents per share, for the quarter ended May 27 versus a profit of $59.2 million, or 11 cents per share, a year ago.
Revenue rose to $3.33 billion from $2.94 billion a year ago.
The latest results include a cost of 2 cents per share, or about $18 million pretax, related to the nationwide recall of all of ConAgra's peanut butter products and a 1 cent per share benefit from lower than expected taxes.
Last year's fourth quarter included a benefit of 4 cents per share from a lower tax rate and 21 cents per share of charges related to restructuring, asset impairment charges and retiring debt early.
Analysts polled by Thomson Financial were expecting fourth-quarter earnings of 31 cents per share on revenue of $2.83 billion.
ConAgra CEO Gary Rodkin said the company's cost-cutting efforts combined with the trading division's record profits helped it post a strong quarter.
The trading division buys and sells agricultural commodities, fertilizer and energy. It generated $659 million revenue during the quarter, up from last year's $359 million.
"They earned almost as much this quarter as they did in their entire best year in recent history," Rodkin said.
Its shares rose 70 cents, or 2.8 percent, to $26.26 in morning trading.
ConAgra recalled its peanut butter in February after federal health officials linked it to cases of salmonella infection. At least 628 people in 47 states were sickened, and several lawsuits have been filed against the company.
ConAgra plans to reintroduce Peter Pan in July. Initially, another company will produce the peanut butter for ConAgra because it doesn't expect to be able to resume production at its Sylvester, Ga., plant until sometime in August, after renovations.
The recall cost ConAgra about $66 million before taxes during the fiscal year and hurt peanut butter sales, which still generated about $92 million in revenue in 2007 versus $147 million in 2006.
Sales of ConAgra's consumer products generated $1.6 billion in revenue during the quarter. That is nearly equal to last year's results because of the peanut butter recall and the sale of the company's refrigerated pizza business. Excluding those items, sales were up 3 percent for the consumer products, which account for more than half the company's revenue.
ConAgra has begun introducing new varieties of Healthy Choice meals and other products. Rodkin said those innovations and other new products that will be introduced over the next year should help increase sales.
For the full year, ConAgra said it earned $764.6 million, or $1.51 per share, on revenue of $12.03 billion. A year earlier, it earned $533.8 million, or $1.03 per share, on revenue of $11.48 billion.
Rodkin said he expects the company's 2008 earnings per share to be near the $1.48 a share that analysts are predicting.
ConAgra's line of products includes several well-known consumer brands such as Chef Boyardee, Egg Beaters, Hunt's, Marie Callender's and Orville Redenbacher.