General Mills (NYSE:GIS) on Wednesday booked a 50% improvement in fourth-quarter profit with the help of price increases, but still saw its results fall short of expectations as commodity pressures continued to weigh on food companies.
The Minneapolis-based consumer-foods maker posted net earnings of $320.2 million, or 48 cents a share, compared with $211.9 million, or 31 cents a share, in the same quarter last year, missing the Streets view of 52 cents.
Revenue for the three months ended May 29 was $3.6 billion, up 3% from $3.53 billion a year ago, and narrowly below average analyst estimates polled by Thomson Reuters of $3.67 billion.
The company, whose brands include Cheerios, Hamburger Helper and Betty Crocker, attributed the growth to strong gains in its bakeries, foodservice and international segments, as well as cost savings.
After noting the company is generally pleased with the fiscal results, General Mills CEO Ken Powell said the year marked a challenging operating environment for food manufacturers as cost inflation rapidly accelerated for various food ingredients and energy.
Climbing commodity costs have forced many such as Kraft (NYSE:KFT) and Starbucks (NASDAQ:SBUX) to raise prices. While General Mills has seen its profit improve in recent quarters, the company has said inflation may force it to lift prices in 2012.
General Mills predicts fiscal 2012 earnings in the range of $2.60 to $2.62 a share, below Wall Street estimates of $2.67 a share.