NEW YORK (AP) -- ConAgra Foods Inc. said Thursday that its profit more than doubled in the fiscal first quarter as it benefited from acquisitions and one-time investment gains.
The Omaha, Neb.-based maker of Healthy Choice, Banquet and Marie Callender's raised its dividend and earnings outlook for the year, sending its shares up 5 percent in premarket trading.
The company also noted that costs for ingredients are easing, suggesting sales volume could improve as the year progresses. Like other packaged food companies, ConAgra's sales volume has suffered as it hiked prices to make up for rising commodity costs.
For the three months ended Aug. 26, the company said it earned $250.1 million, or 61 cents per share. That's compared with $93.8 million, or 22 cents per share, a year ago.
The results included a gain of 20 cents per share related to derivatives, which company uses to hedge against swings in commodity costs.
Not including one-time items, ConAgra earned 44 cents per share. Analysts on average expected a profit of 35 cents per share.
Total sales rose 7 percent to $3.31 billion, which was above the $3.24 billion Wall Street expected. The increase was boosted by its acquisition of Bertolli and P.F. Chang's Home Menu frozen meals during the quarter.
The consumer foods segment, which accounts for the majority of ConAgra's business, saw an 8 percent increase in sales to $2.04 billion, as acquisitions and price hikes offset a decline in volume for existing brands.
Among the brands that posted gains were Marie Callender's, Orville Redenbacher's, Reddi-wip and Slim Jim.
ConAgra said that inflation for ingredient costs in its fiscal 2013 is expected to be lower than previously planned. That will ease the price hikes it passes on to consumers, which should result in better sales volume.
Sales for commercial foods unit posted a 5 percent gain to $1.3 billion, on the strength of its Lamb Weston potato operations.
For the year, ConAgra now expects adjusted earnings of $2.03 to $2.06 per share, up from its previous forecast of $1.95 to $1.99 per share.
The company increased its dividend by a penny to 25 cents per share, starting with the payment to be made in December.