ConAgra Foods Inc. (CAG) beat profit estimates for the second quarter, the company announced on Tuesday. The higher profit was boosted by lower commodity expenses and cost-cutting measures as the food giant makes the shift to healthier, less processed foods.
ConAgra made the decision to implement a major restructuring plan earlier in the year after facing increased pressure from Jana Partners LLC, an activist hedge fund. The restructuring included a spinoff of its Lamb Weston business and the sale of its private label division. The company will also cut 1,500 jobs to save $300 million over the next three years.
Despite reporting a higher profit, ConAgra posted lower-than-expected revenue for the third quarter in a row. Sales in its consumer foods division plummeted 3% in the second quarter.
Operating profit did grow 10% due to fixed reduced commodity costs and higher prices. Net income jumped to $154.9 million, or $.35 a share, up from $10 million ($0.2 cents a share) the previous year.
In 2014, ConAgra posted a $202.8 million loss due to poor performance from its private-label unit.
Excluding certain items, ConAgra earned $.71 per share in the quarter. Analysts were looking for $.62 a share. Total sales declined 1.4% to just $3.09 billion. Analysts were looking for $3.3 billion dollars in sales.