ConAgra Gains from Pilgrim's Pride Sale
During the quarter, ConAgra Foods sold its remaining 15.4 million shares of Pilgrim’s Pride for about $482 million, resulting in a pretax gain of about $329 million, or 40 cents per share.
22/09/05 ConAgra Foods Inc. said that first-quarter earnings more than doubled, reflecting a large gain from selling its remaining shares in Pilgrim’s Pride Corp. as well as solid performance in several areas of the business. Its shares rose more than 9 percent in premarket trading. Price increases and lower costs for pork helped ConAgra offset rising costs for resin -- a petroleum based product used in packaging -- steel, beef and transportation. But the price increases also pushed consumers away from some products, leading to an overall sales decline, the company said.
Net income surged to $352.1 million, or 68 cents per share, in the three months ended Aug. 28, from $134.7 million, or 26 cents per share, a year ago. Sales edged down to $3.36 billion from $3.38 billion last year.
During the quarter, ConAgra Foods sold its remaining 15.4 million shares of Pilgrim’s Pride for about $482 million, resulting in a pretax gain of about $329 million, or 40 cents per share. ConAgra Foods acquired these shares in the autumn of 2003 in connection with the divestiture of its chicken-processing operations to Pilgrim’s Pride.
During the quarter, sales for the Food Ingredients segment were $631 million, an increase of 9% compared with the first quarter last year. Segment operating profit was $76 million, an increase of 27% over the year-ago period; this increase was largely driven by a very favorable market environment for the commodity trading and merchandising operations. Those operations, which include trading and merchandising energy, grains, fertilizer, and other input commodities, contributed $47 million of the segment’s total operating profit of $76 million. Despite a weak performance from the dehydrated product lines, the specialty ingredients products posted growth in sales and operating profit due to a strong performance from the flour milling operations.