ConAgra Foods Inc. (CAG) reported a 30 percent drop in first-quarter earnings on Wednesday, citing sales lost from discontinued operations and higher costs for materials.

The nation's second largest food company earned $135 million, or 26 cents per share, for the period ended Aug. 29, compared with $194.9 million or 37 cents per share, in the same quarter a year ago.

Analysts surveyed by Thomson First Call had expected earnings at 26 cents per share.

Revenue was up 8 percent, to $3.5 billion from $3.23 billion last year, fueled largely by gains in brands including Blue Bonnet (search), Butterball, Chef Boyardee (search) and Kid Cuisine (search).

ConAgra has been moving away from holding businesses that sell products ranging from fertilizers to frozen foods and concentrating heavily on its packaged foods products.

Part of that movement included selling off its chicken processing and farm products businesses, which had added to earnings in ConAgra's first quarter last year.

ConAgra shares were up 74 cents at $26.55 on the New York Stock Exchange (search), after trading above $27 earlier this month and above $29 earlier this year.