("General Mills 1Q Profit Jumps 51%, Boosts EPS View," published
at 7:28 a.m. EDT, partially misstated the new earnings target. A
corrected story follows.)
General Mills Inc.'s (GIS) fiscal first-quarter earnings soared
51% amid U.S. retail sales growth, lower costs and stepped up
advertising.
The results handily topped expectations and the processed-food
giant again raised its fiscal-year earnings view, this time by 20
cents to $4.40 to $4.45 a share.
Consumer-products companies have benefited as commodities prices
have remained off their peaks, though rising sugar prices could
pose a challenge. The maker of cereal and other packaged foods in
July said it didn't expect to lower prices despite the
pullback.
General Mills also has introduced products to help drive its
U.S. retail segment growth such as Progresso High Fiber soups. Its
Betty Crocker brand entered the profitable gluten-free niche with
mixes for cookies, brownies and cakes.
For the quarter ended Aug. 30, the maker of Cheerios cereal and
Yoplait yogurt reported a profit of $420.6 million, or $1.25 a
share, up from $278.5 million, or 79 cents, a year earlier.
Excluding items, such as hedging gains and losses, earnings were
up at $1.28 from 96 cents. The company earlier this month indicated
results likely would top its internal projections but didn't give
details.
Revenue edged up 0.6% to $3.52 billion, with currency
fluctuations hurting sales results by 2 percentage points. Volume
was flat, reflecting the loss of 2 percentage points from divested
product lines.
Analysts polled by Thomson Reuters most recently were looking
for earnings of $1.03 on revenue of $3.49 billion.
Gross margin jumped to 41.5% from 34.1% amid lower costs for
grain and other commodities.
At its U.S. retail business, sales rose 5.8%, with volume up 2%.
Profit rose 21%. In its international division, sales dropped 4.1%
on the weaker dollar as earnings fell 13%.
The bakery and food-service unit remains under pressure amid
restaurant industry weakness, with sales down 16% on divestitures
and falling flour prices. However, segment profit more than doubled
amid lower commodities prices and cost cuts.
Shares closed at $60.97 on Tuesday and didn't trade premarket.
The stock is flat this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com