ConAgra Q1 net income down 41%

American packaged food company ConAgra Foods reported that its net income fell 41.7% to $85.3m for the first quarter that ended 28 August 2011, compared with $146.4m in the previous year.

However, the company’s sales rose 9.5% to $3.07bn, compared with $2.8bn in the previous year.

The consumer foods segment, which accounted for 62% of the quarter’s sales, reported a 4% increase in sales to $1.8bn, due to strong sales of brands such as Healthy Choice, Manwich, Marie Callender’s, Orville Redenbacher’s, Parkay, Slim Jim, Swiss Miss and Wesson.

The company’s commercial food segment, which accounted for 38% of first quarter sales, increased 19% to $1.1bn thanks to higher flour prices and price increases.

The company said that it expects low to mid-single-digit Earnings Per Share (EPS) growth, adjusted for items impacting comparability, in fiscal 2012 due to the timing of inflation and pricing.

ConAgra Foods CEO Gary Rodkin said the first-quarter EPS reflects the negative impact of short-term wheat market dynamics in its commercial foods segment and severe inflation in its consumer foods segment.

"We took pricing actions in the first quarter of both of our operating segments, and more pricing actions will soon be implemented in both segments," Rodkin added.