The turnaround of ConAgra Foods is taking root, as the Omaha food maker swung to a profit in its fiscal 2016 third quarter and beat analysts’ expectations.
ConAgra on Thursday posted a profit of $204.6 million, or 46 cents a share for the quarter that ended Feb. 28. That was an improvement from a year-earlier loss of $954.1 million, or $2.23 a share. Excluding restructuring charges, among other items, third-quarter earnings were 68 cents a share, up from 59 cents.
Quarterly revenue rose 0.6% to $2.92 billion. Analysts projected 58 cents in adjusted earnings per share and $2.86 billion in sales, according to Thomson Reuters.
During the quarter, ConAgra completed the $2.7 billion sale of its private label business to TreeHouse Foods, utilizing “a significant portion” of the proceeds to reduce debt by about $2.15 billion so far, with plans to use the remaining proceeds to further shed debt.
“With the sale of our private label business completed, we are focused on successfully executing our plans to reduce costs and deliver improved price/mix, while continuing to segment our portfolio to enable more impactful marketing and support investments to drive future innovation and deliver improved margins and shareholder value,” ConAgra’s chief executive Sean Connolly said in a press release. “We are on track to establish two independent segments with excellent operating foundations as we separate into two pure-play companies in the fall.”
The company is in the process of spinning of its Lamb Weston frozen-potato line, and as previously announced, will cut $300 million in annual costs that includes 1,500 layoffs, according to The Wall Street Journal.
“The Omaha-based food maker, known for brands including Slim Jim snacks, Banquet frozen meals, and Peter Pan peanut butter, has been reshaping its business as its grapples with consumers’ increasing preference toward foods that are perceived as more natural and healthful and away from packaged options,” the WSJ wrote.