Company News: While Dow dips, two food stocks rise

Foodmakers General Mills and ConAgra both reported solid second quarters and raised their guidance on Thursday, and Wall Street greeted them like comfort food on a cold winter day.

Shares in both companies gained about 1.5 percent on a day when worries about the economy caused the Dow to slip.

ConAgra Foods Inc. had the most sizzle. Quarterly profit jumped 44 percent as the maker of Healthy Choice meals and Chef Boyardee sold off a meats business sooner than expected, cut costs and got better results from its advertising. General Mills Inc. said profit rose 4 percent on growth across all its businesses.

Prudential Equity Group analyst John McMillin said the two were as different as night and day – and that General Mills was the impressive one.

“I think ConAgra did it on cost savings, and share repurchases, and I think General Mills’ numbers were more top line driven,” meaning increased sales, he said. The company spent $150 million to repurchase 5.8 million shares of its stock during the quarter.

“US Airways’ chief executive issued a scathing rebuke Thursday of Delta Air Lines‘ stand-alone reorganization plan and said he is more determined than ever to push ahead with his company’s hostile bid to buy Delta.

Delta shot back that it hasn’t changed its position that it wants to remain independent, intensifying the war of words that started when Tempe, Ariz.-based US Airways Group Inc. disclosed its $8.4 billion offer to buy Delta Air Lines Inc. on Nov. 15.

As Christmas approached, US Airways CEO Doug Parker made it clear his company isn’t going to back down.

Parker said Delta’s projection that it will be worth as much as $12 billion when it emerges from bankruptcy as a stand-alone airline is “way out of whack.”

He said his company’s analysis of Delta’s stand-alone plan values the airline at $5.5 billion to $6.9 billion.

“Rite Aid Corp., the nation’s third-largest drugstore chain, said Thursday that its third-quarter revenues rose 4 percent on stronger pharmacy sales, narrowing its loss from last year and barely squeezing ahead of Wall Street estimates.

The company also reiterated its earnings guidance for the year.

For the three months ending Dec. 2, Rite Aid said its loss attributable to common shareholders was $6.82 million, or a loss of a penny per share.

Analysts surveyed by Thomson Financial predicted a loss of two cents a share on revenues of $4.27 billion.