* Q1 adj. profit 61 cents/share vs. est. 48 cents
* Total sales $2.67 bln vs. est. $2.73 bln
* Shares rise as much as 8.2 pct
(Adds executive comments and company background; updates share
Sept 29 ConAgra Foods Inc, the maker of
Chef Boyardee pasta and Hunt's ketchup, reported a quarterly
profit that handily beat analysts' estimates as it raised prices
on some products and discounted less.
The company's shares rose as much as 8.2 percent to $46.67
in morning trading.
The packaged foods maker has been trying to boost profits by
promoting higher-margin products and clamping down on
unprofitable volume sales to retailers.
ConAgra said on Thursday it stopped promoting brands such as
Chef Boyardee and Snack Pack at $1 at retailers. It also raised
prices on products such as Banquet frozen entrees.
These actions, along with lower commodity costs, drove
margins, which rose 2 percentage points to 27.3 percent in the
"Locking a brand into a $1 price point for decades it's just
not a good business decision because it puts relentless pressure
on margins and food quality ... So the change was long overdue,"
a company executive said on a post-earnings call.
Operating margins rose 5 percentage points to 18.4 percent
as the company kept a tight lid on costs.
Like rivals Campbell Soup Co and General Mills Inc
, ConAgra is struggling to increase sales and profit
margins as consumers move away from packaged foods that are
Earlier this week, ConAgra said it would buy Frontera Foods,
celebrity chef Rick Bayless' Mexican food company, as it looks
to add more premium brands to its portfolio.
The company is also in the middle of divesting its $3
billion Lamb Weston potato business and sold its spicing and
flavoring business for more than $300 million earlier this year.
The Lamb Weston business reported a 4 percent rise in net
sales in the quarter ended Aug. 28.
Net income attributable to the company was $186.2 million,
or 42 cents per share, compared with a loss of $1.15 billion, or
$2.68 per share, in the same period a year earlier.
The company booked a $1.32 billion loss from discontinued
operations in the year-earlier period after selling its
loss-making private-brands business to TreeHouse Foods Inc
Excluding one-time charges and discontinued operations,
ConAgra earned 61 cents per share, above the average analyst
estimate of 48 cents, according to Thomson Reuters I/B/E/S.
Sales, however, fell 4.6 percent to $2.67 billion, missing
analysts' estimate of $2.73 billion, hurt by lower demand for
its grocery, snacks and frozen food items.
(Reporting by Gayathree Ganesan in Bengaluru; Editing by Anil
D'Silva and Maju Samuel)