February 26, 2024

General Mills Earnings Beat Expectations

The company, whose brands include Cheerios and Progresso Soups, also benefited from its longtime focus on reining in costs. Like most food companies, General Mills raised prices to try to offset some of the effects of higher costs for grains and other items.

But the company’s results outshine those reported by its rival food maker ConAgra Foods, which missed analysts’ expectations on Tuesday.

“General Mills operates with a stronger brand portfolio than ConAgra,” said a Morningstar analyst, Erin Lash. “That’s one of the things that we think serves General Mills well and will continue to serve them well in this tough consumer environment.”

General Mills said sales rose 8.9 percent to $3.85 billion in the first quarter ended on Aug. 28, helped by its recently acquired Yoplait yogurt business and the willingness of consumers to accept higher prices.

Snacks, which include Nature Valley bars, showed one of the largest sales gains among the segments in the United States with a 17 percent rise. In contrast, sales in the meals unit, which includes canned soups and dinner mixes, fell 4 percent. The business in the United States accounts for nearly two-thirds of sales.

The international Yoplait unit accounted for about one-third of General Mills’s growth, helping the company beat the $3.81 billion in net sales Wall Street was expecting, according to Thomson Reuters.

Net income fell to $405.6 million, or 61 cents a share, from $472.1 million, or 70 cents per share, a year earlier.

Excluding special items, earnings came to 64 cents a share, beating the 62 cents that analysts expected.

The company maintained its fiscal 2012 earnings forecast of $2.59 to $2.61 a share, excluding the costs of integrating Yoplait. It still expects costs to rise 10 percent to 11 percent for the year, more than double its inflation rate in fiscal 2011.

General Mills’s shares closed up 2.5 percent to $38.44, on a down day on Wall Street.

Article source: http://feeds.nytimes.com/click.phdo?i=978ba54bf2cc3e5bfc2c3e2b243c7b8e

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