Conagra Foods (CAG), one of North America's largest packaged food companies, has recorded a 3.34 times surge in profit for the quarter ended Aug. 24, 2014, helped by income from discontinued operations. The company earned $482.30 million or $1.12 a share in the first-quarter compared with $144.30 million or $0.34 a share a year ago. Adjusted earnings per share came in at $0.39, when analysts expected $0.35.

Revenue during the first-quarter went down marginally 0.40 percent to $3,701 million from $3715.80 million in the last year period. The company has recorded income of $373.30 million from discontinued operations during the first quarter compared with $13.80 million in the same period last year.

Gross margin contracted by 230 basis points over the previous year period to 19.02 percent. Total expenses as a percentage of revenues increased to 94.35 percent from 93.22 percent in the same period last year. That has resulted in contraction of 113 basis points in operating margins to 5.65 percent. Operating income stood at $209 million, compared with $251.90 million in the last year period.

Gary Rodkin, ConAgra Foods' chief executive officer, said, ''We are pleased with the good start to fiscal 2015, which demonstrates improving fundamentals and better execution. Volume for Consumer Foods is recovering, Lamb Weston’s foodservice channel sales are robust, and cost savings programs across the company are coming in as planned. We remain confident that fiscal 2015 will be a year of stabilization and recovery, and I look forward to updating you on our progress throughout the fiscal year.''

The company expects comparable fiscal 2015 EPS to show a mid-single digit rate of growth over comparable fiscal 2014 EPS of $2.17.

Cash Flow

Conagra Foods has generated cash of $233.60 million from operating activities during the quarter, up 40.64 percent or $67.50 million when compared with the last year period.

The company has generated cash of $331.60 million from investing activities during the quarter, as against cash outgo of $177.60 million in the last year period. It has made net capital expenditure of $109.90 million during the quarter, which was lower by 35.47 percent or $60.40 million, from a year ago.

The company has spent $613.70 million from financing activities during the quarter, as against cash inflow of $22.60 million in the last year period. It has made net repayment of $529.40 million debt during the quarter. It has raised net of $27.10 million by selling common stocks.

The company's cash dividend payment increased 0.67 percent or $0.70 million to $105.50 million. Dividend payment accounted for 45.16 percent of operating cash flow for the quarter, compared with 63.09 percent in the same period previous year.

As on Aug. 24, 2014, the company's cash balance stood at $133.70 million, down 31.15 percent or $60.50 million from Aug. 25, 2013.

Working Capital

Conagra Foods /de/ has witnessed a decline in the working capital over the last one year. The company's working capital stood at $791.30 million as at Aug. 24, 2014, down $202.80 million or 20.40 percent from $994.10 million on Aug. 25, 2013. It registered a decrease in current ratio to 1.27 as at Aug. 24, 2014 from 1.29 on Aug. 25, 2013.

The company's cash conversion cycle (CCC) was increased to 40 days for first quarter from 2 days for the last year period. CCC is a liquidity metric which expresses the length of time (in days) that a company uses to sell inventory, collect receivables and pay its accounts payable. Decreasing or steady CCCs are good for business.

Days' sales outstanding moved down to 29 days for first quarter compared with 31 days for the last year period. This indicates the company has shortened credit period to clients for making payment.

The company's days' inventory outstanding decreased to 34 days for first quarter compared with 77 days for the last year period. This suggests the company took less time to convert the inventory into sales.

The company's days' payable outstanding went down to 45 days for first quarter from 48 days for the last year period. This reflects that the company has made early payment to vendors compared to prior year period.

Debt Position

Conagra Foods /de/ has witnessed a decline in the total debt over the last one year. As on Aug. 24, 2014, total debt stood at $7,926 million, down 18.17 percent or $1759.70 million, from Aug. 25, 2013. The company total debt was 40.91 percent of total assets as on Aug. 24, 2014, compared with 47.32 percent on Aug. 25, 2013.

Shares of the company declined $0.36 or 1.11 percent to settle at $32.01 on Wednesday.