Higher prices raise ConAgra Foods net income by 26.5 per cent

Boosted by strong performance in commercial foods.

A branch of Marie Callender's in California, owned by ConAgra. Credit: Getty Images

The US packaged foods firm ConAgra Foods has reported a net income of $272.2m for the fiscal third quarter ended 26 February 2012 – an increase of 26.5 per cent, compared to $215.1m for the corresponding period last year.   

The company posted net sales of $3.37bn (Q3 2011: $3.14bn) and net interest expenses of $50m, down from $52 million a year ago.

Sales of commercial foods brought in $1.22bn, an increase of 13.7 per cent compared to $1.07bn the previous year. This was driven by rises in commodity prices and increased volumes for ConAgra’s Lamb Weston potato operations, as well as the pass-through of higher wheat costs in the milling operations. Other product lines in the segment posted good top-line results.

Due to the high level of cost inflation over the past year, food-makers across the US have been raising prices. ConAgra said that this peaked in the third quarter but expects the pressure to ease in the current period.

The consumer foods segment posted sales of $2.16bn for the fiscal third quarter, an increase of 4.1 per cent compared to $2.07bn for the same period last year.

Gary Rodkin, CEO of ConAgra Foods, said: “Conditions have been difficult across the industry due to high inflation and soft volumes for retail consumer food brands . . . [But] we benefited from total margin management efforts that include price increases in both operating segments and good overall cost savings.”