What happened

Shares of Conagra Brands (CAG -0.80%) climbed 11% Thursday morning after the packaged foods company reported better-than-expected earnings and said it was making progress integrating a major acquisition.

So what

Conagra reported fiscal third-quarter adjusted earnings of $0.51 per share, two cents ahead of estimates, on revenue of $2.71 billion, which was a little light compared with the $2.75 billion expected. The company also reiterated its previous full-fiscal-year guidance for earnings of between $2.03 and $2.08 per share, despite warning that full-year gross margin might fall below the 29.3% to 29.6% expected range.

A plant growing from a jar of coins.

Image source: Getty Images.

In recent years, the company has been battling changing consumer preferences and higher raw material and transportation costs. It is also trying to integrate its $8 billion acquisition of Pinnacle Foods, a collection of brands including Birds Eye, Duncan Hines, and Wish-Bone that has experienced sluggish growth.

Even after Thursday's gains, Conagra shares are still down 30% over the past year, with the stock not having recovered from a 34% drop in December.

The company said its legacy businesses are doing well, but the Pinnacle group remains an underperformer.

Check out the latest earnings call transcript for Conagra Brands.

Now what

In comments following the earnings release, CEO Sean Connolly said that the company is "aggressively applying" its business practices at Pinnacle, and that "we are confident that we have identified the issues and have the right action plans in place to improve the performance of these terrific brands."

The stock still has a long way to go to recover from the December drop, but investors see the latest results as a step in the right direction.