General Mills Inc reported a better-than-expected quarterly profit, helped by cost cuts and higher demand in markets outside the United States, and the company forecast full-year earnings above analysts' expectations.
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Shares of the maker of Cheerios cereal and Yoplait yoghurt, which also raised its dividend, rose 1.9 percent to $67 in premarket trading on Wednesday. If the stock opens at this level, it will hit a record high.
General Mills has responded to weak U.S. sales by cutting jobs, selling plants and exiting brands with lower profits, while investing in gluten-free foods and cutting back on salt and artificial ingredients in its products.
The company's U.S. retail sales dropped 12 percent to $2.2 billion in the fourth quarter, hurt by lower volume sales. Sales in other markets declined 1 percent as a strong dollar more than offset the benefit of a 3 percent rise on a constant-currency basis.
General Mills said it was cutting costs further, which would push up its adjusted profit by 6-8 percent in the year ending May 2017.
This translates into $3.09-$3.15 per share, beating the average analyst estimate of $3.04, according to Thomson Reuters I/B/E/S.
Net earnings attributable to General Mills more than doubled to $379.6 million, or 62 cents per share, in the quarter ended May 29. Selling, general and administrative expenses fell nearly 6 percent.
Excluding items, the company earned 66 cents per share.
Net sales, however, fell 8.6 percent to $3.93 billion, the fourth straight quarter of decline.
Analysts on average had expected a profit of 60 cents per share and revenue of $3.86 billion.
The company raised its quarterly dividend to 48 cents per share from 46 cents.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Kirti Pandey)