ConAgra Foods Inc. on Thursday reported a quarterly profit slightly ahead of Wall Street estimates and raised its long-term outlook, citing increased cost-savings from its acquisition of Ralcorp Holdings.
ConAgra closed its $5 billion purchase of Ralcorp in January, making it the leading U.S. manufacturer of "private label" foods, which retailers brand as their own. It also sells branded products, including Chef Boyardee pasta and Hunt's ketchup.
It said it now expects $300 million of annual savings from the acquired business by the end of fiscal 2017, up from an original estimate of $225 million.
In the fiscal fourth quarter, ended May 26, net income was $192.2 million, or 45 cents per share, compared with a net loss of $86.2 million, or 21 cents per share, a year earlier.
Excluding one-time items, profit was 60 cents per share. On that basis, analysts on average were expecting 59 cents per share, according to Thomson Reuters I/B/E/S.
Net sales jumped 34 percent to $4.59 billion, just shy of analysts' average estimate of $4.60 billion.
In the current quarter, ConAgra said earnings would be flat due to significant marketing costs associated with the introduction of new summer products. Subsequent quarters should see profit growth, it said. For the full year, it forecast earnings of $2.40 per share.
In the medium term, it sees earnings growth of at least 10 percent annually in fiscal years 2015 to 2017 as the savings from the Ralcorp deal materialize.
Longer-term, it sees annual growth of 7 percent to 9 percent for earnings and 3 percent to 4 percent for sales. That is up from its prior growth targets of 6 percent to 8 percent for earnings and 3 percent for sales.
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