General Mills Sees Job Cuts, Posts Sales Drop


General Mills Inc, the maker of Cheerios cereal and Betty Crocker cake mixes, reported a better-than-expected quarterly profit as sales rose in the United States after five straight quarters of decline.

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Sales in the United States grew 1 percent in the third quarter, helped by higher sales of yogurt and snacks, the company said on Wednesday.

General Mills shares rose about 1 percent to $52.40 in premarket trading.

The company, which makes Yoplait yoghurts, has seen sluggish U.S. sales of products such as cereals and frozen foods in the past few years as consumers shift to foods perceived as healthier.

General Mills, along with ConAgra Foods Inc and Campbell Soup Co, is expanding into faster-growing segments such as natural and organic foods.

General Mills said in September that it would acquire organic food maker Annie's Inc for about $820 million.

The company also said on Wednesday that it expected to complete the elimination of about 800 jobs, mainly in the United States, by the end of fiscal 2015 under its "Catalyst" cost-cutting plan.

General Mills expects to take a net charge of about $146 million related to these job cuts, it said.

The company will also shut plants in Methuen in Massachusetts and Lodi in California under another restructuring plan, called "Project Century", cutting about 680 jobs by the end of fiscal year 2016.

General Mills said in January that it would close plants in Midland, Ontario, Canada and New Albany, Indiana, cutting about 500 jobs under Project Century.

Net income attributable to the company fell to $343.2 million, or 56 cents per share, in the quarter ended Feb. 22 from $410.6 million, or 64 cents per share, a year earlier.

Excluding items, General Mills earned 70 cents per share.

Net sales declined 0.6 percent to $4.35 billion.

Analysts on average had expected a profit of 67 cents per share and revenue of $4.35 billion, according to Thomson Reuters I/B/E/S. (Reporting by Anjali Athavaley in New York and Sruthi Ramakrishnan in Bengaluru; Editing by Kirti Pandey)