ConAgra Foods Inc.'s profit jumped 43 percent in the second quarter as the popularity of its foods continued to grow with frugal shoppers.
The company, which makes Chef Boyardee, Marie Callender's and Healthy Choice products, raised its full-year guidance for the second time in three months based on the strong performance.
ConAgra, like many packaged food makers, has seen its consumer foods business grow steadily as people try to save money by eating at home more. It also has benefited from a drop in commodity prices for food ingredients.
Sales in its consumer foods unit, which makes up the majority of its business, grew 3 percent for the quarter with strong sales of some of its lower-priced staples like Banquet, Chef Boyardee and Peter Pan.
But the company's total sales fell 3 percent to $3.17 billion due to an 11 percent drop in its commercial business revenue, a result of lower flour milling sales and struggles in the restaurant industry as consumers eat out less often.
Revenue fell short of Wall Street's forecast of $3.33 billion.
ConAgra reported that it earned $239.7 million, or 54 cents per share, for the quarter, up from $168.1 million, or 37 cents per share, in the same quarter last year.
Income from continuing operations rose to $243.2 million, or 55 cents per share, from $172.1 million, or 38 cents per share. Excluding benefits of 2 cents per share for special items, income from continuing operations was 52 cents per share in the latest quarter.
The performance beat the average forecast of 47 cents per share among analysts polled by Thomson Reuters. Analyst estimates typically exclude one-time items.
"These guys have been on a real good roll lately," said Jack Russo, Edward Jones analyst.
He said the company is in a good position with its convenient foods that are low cost and is really benefiting from the trend from consumers eating at home more often and lower commodity costs. The company also continues to invest in product development and marketing, boding well for it moving forward.
ConAgra, based in Omaha, Neb., also had an optimistic outlook for its future. The company now anticipates adjusted income from continuing operations of about $1.73 per share for fiscal 2010. In September, ConAgra boosted its 2010 outlook to nearly $1.70 per share from a previous range of $1.63 to $1.66 per share.
The packaged foods maker also said it expects an estimated insurance payment of 5 cents per share related to a plant fire to arrive in fiscal 2011 instead of fiscal 2010 as previously predicted.
Shares of ConAgra rose 27 cents to $22.43 in midday trading Monday.
AP Business Reporter Michelle Chapman contributed to this report from New York