ConAgra Foods 4Q net income more than doubles

OMAHA, Neb. — ConAgra's fourth-quarter net income more than doubled thanks to higher food prices and an insurance settlement.

But the company warned Thursday that first-quarter earnings may fall below last year's numbers in what CEO Gary Rodkin calls a "challenging" market place. ConAgra shares fell 3 percent in premarket trading.

ConAgra and other food producers have had to raise prices as higher ingredient and material costs cut into profits. This quarter, the company's consumer foods segment saw cost inflation rise 9 percent.

The maker of Slim Jim, Healthy Choice, Chef Boyardee and other food products earned $254.9 million, or 61 cents per share, for the period ended May 29. That's up from $90.6 million, or 20 cents per share, a year earlier.

Adjusted earnings from continuing operations rose to 47 cents per share from 38 cents per share, the company said Thursday.

Analysts polled by FactSet expected 48 cents per share.

The current quarter's results included about 16 cents per share from an insurance settlement, approximately 2 cents per share in restructuring charges and other items.

Revenue climbed 5 percent to $3.21 billion from $3.05 billion, just edging out Wall Street expectations.

The consumer foods division, which made up 63 percent of the quarter's sales, reported a slight sales increase in the quarter with strength in brands such as Hebrew National, Peter Pan, Wesson, Slim Jim and others.

ConAgra said it raised prices for cooking oil-related products, frozen foods and snacks. The company said more prices hikes have been made in early fiscal 2012 and that prices will rise again if needed.

In the commercial foods segment sales rose 15 percent on higher flour milling prices, price increases and better volumes for Lamb Weston specialty potato products. The unit comprises 37 percent of the quarter's sales.

For the year, ConAgra reported net income of $817 million, or $1.88 per share. That compares with $725.8 million, or $1.62 per share, in the previous year.

Adjusted earnings from continuing operations were $1.75 per share.

Annual revenue improved to $12.3 billion from $12.01 billion.

ConAgra Foods Inc., based in Omaha, Neb., with local operations in Naperville and Glen Ellyn, expects fiscal 2012 adjusted earnings per share to climb by a low- to mid-single digit percentage rate from fiscal 2011's $1.75 per share.

Analysts forecast $1.87 per share for the year.

The company also said it expects its first-quarter earnings to come in below the prior-year period's 34 cents per share.

Wall Street predicts quarterly earnings of 36 cents per share.

ConAgra's shares dropped 77 cents to $24.65 before the market opened.

The company maintained its long-term earnings per share forecast for 6 percent to 8 percent growth each year.