(AP) — ConAgra Foods Inc. said Thursday that its second-quarter net income jumped more than 17 percent, largely on gains from its recent acquisition of Ralcorp. It also gave a better-than-expected profit forecast for the year, sending its shares up sharply.
The Omaha, Neb., company, which owns brands such as Chef Boyardee and Marie Callender's, acquired private-label food maker Ralcorp for $5 billion in January. The deal made it the nation's biggest producer of store-brand foods and dramatically adding to its revenue for the private-label division in the most recent quarter.
ConAgra's net income jumped to $248.7 million, or 58 cents per share, for the quarter that ended in November from $211.6 million, or 51 cents per share, last year. Its revenue increased more than 26 percent to $4.71 billion.
Revenue from consumer foods, its biggest segment, slipped 0.4 percent and commercial foods revenue increased 3 percent. Its private brands business grew several times over, jumping from $177.4 million last year to $1.12 billion this year.
Analysts polled by FactSet were anticipating earnings of 56 cents per share on revenue of $4.65 billion.
ConAgra said it expects to earn between $2.34 and $2.38 per share for 2014 on an adjusted basis, exceeding analyst expectations of $2.33 per share.
While ConAgra warned that challenging industry conditions and a weak potato crop could weigh on its business ahead, it stood by its forecast of 10 percent annual earnings growth from 2015 through 2017.
Shares increased $1.64, or 5.2 percent, to $33.43 in midday trading. Its shares rose almost 8 percent in 2013 through Wednesday.