(Reuters) - ConAgra Foods Inc on Thursday reported a higher-than-expected quarterly profit and said its consumer foods business was recovering.
Net income rose to $484.5 million, or $1.12 per share, in the first quarter ended on Aug. 24 from $147.2 million, or 34 cents per share, a year earlier.
The results included a large gain from the merger of ConAgra’s flour mill operations with those of agribusiness Cargill Inc [CARG.UL] into a joint venture called Ardent Mills.
Excluding special items, earnings from continuing operations were 39 cents per share. Analysts on average were expecting 35 cents.
Shares of ConAgra were up 1.5 percent at $32.49 in early trading.
Revenue dipped 0.4 percent to $3.7 billion as sales from the consumer foods segment, which includes brands like Orville Redenbacher‘s, Chef Boyardee and Healthy Choice, declined 1 percent. But the company said the segment’s performance had improved from recent quarters.
The company is focusing on healthier options such as low-fat meals to boost its consumer brands business.
“Volume for consumer foods is recovering,” Chief Executive Officer Gary Rodkin said in a statement, adding that cost-saving programs across the company were coming in as planned.
The company said last month that Rodkin would retire in May, the end of the fiscal year.
Rodkin, who has headed ConAgra since 2005, has been under pressure from shareholders to fix problems resulting from the Omaha-based company’s $5 billion acquisition of Ralcorp’s private brand business in January 2013.
The Ralcorp acquisition made ConAgra the biggest U.S. manufacturer of foods sold under supermarket brands, but that business has struggled to reach its targets. Sales in ConAgra’s private brands segment declined 2 percent in the quarter.
“Private brand sales were down less than we had estimated, though the margin was softer,” JPMorgan analyst Ken Goldman wrote in a research note.
Goldman said overall results were positive, with sales in the consumer and commercial foods segments coming in better than expected.
Reporting by Anjali Athavaley in New York; Editing by Lisa Von Ahn