Despite 19% Jump in Q3 Profit, Traders Selling ConAgra (CAG) Shares as Guidance Lags the Street

Helped by a consumer trend toward cheaper prepared meals amid the recent economic malaise, ConAgra Foods (NYSE: CAG) announced on Thursday a 19 percent increase in quarterly profit. Traders are selling the stock today, however, as ConAgra reaffirmed FY10 guidance that still remains below market expectations.

The packaged foods maker reported fiscal third-quarter earnings of $229.6 million, or 51 cents per share, compared to earnings of $193.2 million, or 43 cents per share, in the same quarter last year. Excluding one-time items, ConAgra posted earnings of 44 cents per share in the quarter, which was in line with market expectations.

On the sales side of things, ConAgra reported a one percent drop to $3.1 billion, just off the pace of $3.15 billion that the street was looking for. Consumer foods revenue, which makes up two-thirds of the company’s sales, increased 2 percent, while commercial foods sales were down 6 percent during the quarter.

"We are pleased to report another good quarter where comparable EPS growth was primarily driven by profit improvement for our Consumer Foods segment,” Gary Rodkin, ConAgra Foods' chief executive officer, commented. “The continued momentum in our sales, innovation, marketing, and cost-savings initiatives is generating the second-half results we expected.”

Shares of ConAgra are down 4.3 percent to $24.96 in midday market action.

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