Consumer Food Sales Boost ConAgra's Profits

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Researched by Industrial Info Resources (Sugar Land, Texas)--ConAgra Foods Incorporated (NYSE:CAG) (Omaha, Nebraska) recently reported earnings for the 2010 fiscal first quarter, which ended August 30. The company's net sales were down 3.1%, although total operating profits were up 22% from the same period last year. In a press release, ConAgra noted that "significantly higher commodity costs in the year-ago period created a favorable profit comparison in the current quarter," in regard to the company's Consumer Foods segment, which accounted for 63% of the company's sales.

The Consumer Foods segment posted sales of $1.86 billion, representing a modest sales increase of 0.6%, but profits from the segment were much higher than those of 1Q09. "Comparable [adjusted] operating profits grew 43%, reflecting a relatively easy lap over last year," said ConAgra CEO Gary Rodkin of the Consumer Foods segment. "That's quite an improvement from some of the challenging quarters you saw early in last fiscal year. Our cost savings are coming in better than we planned. Our sales and mix are good and, of course, inflation is more manageable. That's a pretty powerful combination in terms of driving the bottom line."

Sales in the company's Commercial Foods segment were $1.1 billion, representing a drop of 8.8% from the segment's 2Q09 sales of $1.2 billion. Despite this drop, operating profits for this segment were up 5.2%.

Industrial Info is currently tracking more than $375 million of ConAgra's projects in the U.S. and Canada. While several of the projects are smaller maintenance shutdowns, a few large ConAgra projects dominate the company's activities in North America. One such project is the planned grassroot sweet potato processing plant near Delhi, Louisiana. Phase I construction, with an estimated total investment value of $156 million, is planned to begin next month and will involve the construction of a 200,000-square-foot LEED-certified building, which includes state-of-the-art packing and processing equipment for sweet potatoes. The plant is tentatively scheduled for completion in late 2010. A second phase, which is still in the early planning stages, will add additional square footage and equipment to increase the facility's production capacity. Information on these and other Food & Beverage Industry projects is available in Industrial Info's North American Industrial Database.

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