General Mills (NYSE:GIS) said on Wednesday its third-quarter earnings were up 1.8% to beat the Street’s expectations, as the cereal maker sold more products in its base business for the first time in two years.
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The company had seen an extended decline in sales volume, which is measured by weight and fell each quarter since the third quarter of 2011, but swung to a higher volume during the latest period.
However, General Mills continued to show sales declines in two of its largest businesses, cereal and yogurt, and provided a downbeat forecast for the fourth quarter on higher marketing and supply chain costs.
Fourth-quarter earnings of 50 cents to 52 cents a share are expected, while the company increased its outlook for full-year adjusted earnings to between $2.66 and $2.68 a share. Analysts expected per-share earnings of 59 cents for the current quarter.
Shares of General Mills were up 2.28% to $47.48 a share in early morning trading.
“We are continuing to see slow, but steady, improvement in the operating environment,” Chairman and Chief Executive Ken Powell said in a statement. “Trends in our established businesses are improving, and integration of our new businesses is going smoothly. We're preparing to launch a promising slate of new products as our new fiscal year begins this summer, and our plans for fiscal 2014 call for high single-digit EPS growth, consistent with our long-term model.”
General Mills reported a profit of $398.4 million, or 60 cents a share, compared to $391.5 million, or 58 cents a share, in the year-earlier period. Adjusted per-share earnings, which exclude restructuring costs and other items, jumped nine cents to 64 cents.
Revenue climbed 7.5% to $4.43 billion.
The results beat Wall Street’s view, as analysts projected revenue of $4.36 billion and per-share earnings of 57 cents.
Excluding acquisitions, sales rose 2% during the third quarter. Overall cereal sales fell 2%, and Yoplait yogurt sales dropped 4%. But General Mills’ U.S. retail segment, its largest by revenue, posted a 2.1% rise in net sales and 13% jump in operating profit. Sales at its international segment surged 24% to $1.3 billion.