Shoppers might be cutting back on spending, but apparently they still want their brand-name frozen dinners, hot dogs and peanut butter.

ConAgra Foods

(CAG) - Get Report

, maker of Slim Jim, Chef Boyardee and Hunt's tomato sauce, saw its fourth-quarter profit fall 13%, but was lifted by strength in sales at its consumer-foods division.

Still, this wasn't enough for investors, who sent shares of the company down more than 7% to $18.62 in morning trading.

Curiously, investors in today's economy have been prone to reward companies that meet or exceed expectations, even if they post a decline in profit. But the standard seems to be higher for ConAgra -- at least so far today.

ConAgra shares have surged 21% this year, making the stock one of the better performers in the food sector.

Profit dropped 13% during the quarter to $174.7 million, or 39 cents a share, compared with $201.3 million, or 41 cents, in the year-ago period.

The prior year's results included a 23 cent buffer from the sale of its commodity-trading unit. Then again, an extra week in this year's quarter added about 3 cents per share to the results -- so pick your caveat accordingly.

Excluding expenses to the tune of 2 cents a share, income was 41 cents, in-line with analysts' expectations.

Facing increased competition from private label brands, the company's revenue still managed to jump 8 % to $3.3 billion from $3.07 billion, with Healthy Choice, Banquet, Hebrew National and Peter Pan brands seeing double-digit sales growth.

At the commercial-foods segment, sales dipped 2% to $1.16 billion on lower flour prices.

And its Slim Jim business is having some trouble, after an explosion at a plant earlier this month. ConAgra has had to rely on existing Slim Jim inventories, lowering shipment levels. The company is currently working on building a back-up supply.

Service disruptions will continue through the first-quarter, more stable production levels should be reached by the second quarter and there will be no long-term impact.

ConAgra expects 2010 earnings in the range of $1.63 to $1.66 per share, in-line and slightly higher than analysts' forecast.

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