cheerios cereal

General Mills Reports First Rise in Sales Since 2011

Shares in the company, which makes Cheerios cereal, Progresso soups and Häagen-Dazs ice cream, rose 3 percent.

So far this year the shares are up 19 percent, with much of that coming after the deal by Berkshire Hathaway and 3G Capital for H. J. Heinz, which has generally raised valuations for many food companies, Jack Russo, an analyst at Edward Jones, said.

Mr. Russo said General Mills had been performing better in some of its challenged businesses, including cereal and yogurt.

“It looks like they’re reinvesting back into the business, which is always smart,” Mr. Russo said.

Excluding the benefit from the recent acquisitions of Yoki Alimentos in Brazil and Yoplait Canada, General Mills said sales by volume rose 1 percent. That is its first gain for that measure since the third quarter of fiscal 2011. Since then, the company had raised prices on many of its products to offset commodity cost inflation, which hurt sales.

“We think the consumer environment is improving,” the chief executive, Ken Powell, said in an interview on Wednesday. “As the price comparison moderates, the consumer is coming back.”

In the third quarter, ended on Feb. 24, net income rose to $398.4 million, or 60 cents a share, from $391.5 million, or 58 cents a share, a year earlier.

Excluding items like the costs of valuing commodity hedges and integrating recent acquisitions, earnings were 64 cents a share. Analysts on average had expected 57 cents, according to Thomson Reuters

Sales rose 7.5 percent to $4.43 billion. Excluding the acquisitions, sales grew 2 percent, with a percentage point coming from higher sales volume.

General Mills lifted its full-year outlook by only a penny a share because of higher costs in the current fourth quarter related to a comparatively higher tax rate and commodity costs. The company said fourth-quarter earnings would be lower than a year ago.

General Mills shares rose $1.19, to $47.61, on the New York Stock Exchange.

Article source: http://www.nytimes.com/2013/03/21/business/general-mills-reports-first-rise-in-sales-since-2011.html?partner=rss&emc=rss

General Mills Profit Falls 28%; Costs Rise Faster Than Prices

The company maintained its full-year outlook and said it expected strong sales and profitability gains in the second half of the fiscal year. However, it cautioned that its gross margins would be lower during that time given continued cost pressures and its recent acquisition of the lower-margin Yoplait.

General Mills, which makes Cheerios cereal, Nature Valley granola and Hamburger Helper, remains one of the most popular food brands in grocery stores. But like most of its peers, it has struggled with higher costs for things as diverse as ingredients and labor. The company forecast cost increases of 10 to 11 percent for the year and has raised its prices to offset that pressure.

Net income was $444.8 million, or 67 cents a share, compared with $613.9 million, or 92 cents a share, in the period a year earlier. Excluding charges tied to its Yoplait deal and other items, earnings were 76 cents a share.

Revenue rose 14 percent, to $4.62 billion.

“We knew it was going to be a tough environment and it is, but the year is shaping up as we anticipated,” said Don Mulligan, the company’s chief financial officer.

The company, based in Minneapolis, reported that its biggest revenue increase was in its international business. General Mills, which already distributed Yoplait products in the United States, announced in July that it was acquiring a controlling stake in the company. This was the first full quarter with the yogurt brand under its ownership, which lifted its international sales 55 percent.

Revenue at the bakeries and food service division increased 12 percent, with strong sales of products like Pillsbury Mini-Pancakes and French Toast. Revenue from the company’s United States retail business increased 3 percent on strong sales of cereal and snacks, but sales of yogurt and some baking products with higher prices were weaker.

For the full year, General Mills still expects adjusted earnings of $2.59 to $2.61 a share; analysts forecast $2.61 a share.

Shares fell 32 cents, or almost 1 percent, to $39.27.

Article source: http://feeds.nytimes.com/click.phdo?i=55495f79ff949e0525c1eba9f1b560fb

General Mills Reports First Rise in Sales Since 2011

General Mills Profit Falls 28%; Costs Rise Faster Than Prices

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