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Looking to make up losses, ConAgra to increase prices

Tuesday, December 21, 2010

As a staple of one division of ConAgra, potatoes were unexpectedly high priced and low quality, which contributed to the company's losses.
As a staple of one division of ConAgra, potatoes were unexpectedly high priced and low quality, which contributed to the company's losses.

As part of a strategy to enhance financial results during the next several months, ConAgra is increasing prices, the company announced.

Profits during the company's second quarter were weaker than anticipated, which is what was predicted earlier this month. ConAgra slashed 2011 forecasts for a second time and various price increases already have been implemented while others will follow soon.

"We are confident that the net effect of these pricing increases will be positive, despite some potential modest volume decline," chief executive officer Gary Rodkin said in a news release.

Net income decreased in this year's fiscal second quarter to $200.9 million as compared to $239.7 million from last year's fiscal second quarter. Losses also derived from the rising cost of commodities and tepid reaction to promotional campaigns.

The company's commercial foods division, of which French fries are a staple, also did not meet expectations. Rodkin attributed that to high costs and low quality of potatoes. But he did underscore the company's belief that brighter days are ahead.

"Our products will continue to deliver outstanding value to consumers even after these pricing actions," he said.

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