General Mills earnings jump 10%

by Jeff Gelski
Share This:

MINNEAPOLIS — General Mills, Inc. posted net earnings of $1.14 billion for the fiscal year ended May 27, equal to $3.30 per share on the common stock, up from $1.09 billion, or $3.05 per share, in the previous fiscal year.

Net sales for the fiscal year grew 6% to $12.44 billion, which compared with $11.71 billion in the previous fiscal year. Unit volume rose 4%. Total return to General Mills shareholders in fiscal 2007 through stock price appreciation and dividends exceeded 19%, said Steve Sanger, chairman and chief executive officer.

In the fourth quarter ended May 27, net earnings reached $224 million, or 65c per share, which compared with $222 million, or 62c, in the previous fiscal year. Fourth-quarter net sales grew 6% to $3.06 billion from $2.86 billion in the previous year’s fourth quarter. Fourth-quarter unit volume also grew 6%.

General Mills expects 2008 earnings per share to be in the range of $3.39 to $3.43, which would represent growth of 7% to 8% from 2007 results.

"We expect fiscal 2008 to be another year of strong operating performance, consistent with our long-term goals," Mr. Sanger said. "Our growth model calls for low single-digit growth in net sales, mid single-digit growth in segment operating profits, and high single-digit growth in earnings per share.

"We expect to meet these targets in 2008 despite the estimated 5% input-cost inflation and increased consumer marketing investment that is included in our plans."

For the 2007 fiscal year, operating profit increased in all three General Mills segments: U.S. Retail, International and Bakeries and Foodservice.

In U.S. Retail, segment operating profits rose 5% to reach nearly $1.9 billion. Fiscal 2007 net sales grew 4% to nearly $8.5 billion. Unit volume also increased 4%.

Within the Snacks division of U.S. Retail, net sales rose 10% to exceed $1 billion for the first time. Grain snacks such as Nature Valley granola bars and new Fiber One bars led the growth.

Yoplait sales grew 6%, led by Yoplait light varieties, Go-gurt and Yoplait Kids yogurt fortified with DHA Omega 3. Net sales for the Meals division grew 5%. The division reported strong growth of Progresso ready-to-serve soups and Hamburger Helper mixes.

Net sales for Pillsbury USA and the Baking Products division each grew 3%. Big G cereals posted a 2% sales increase and reported strong performance from the market-leading Cheerios franchise and new cereals introduced during the year.

In the International segment, net sales jumped 16% in 2007 to exceed $2.1 billion. Unit volume grew 8%, and favorable currency exchange contributed 4 points of sales growth. Operating profits rose 11% to $216 million despite double-digit growth in consumer marketing expense.

In the Bakeries and Foodservice segment, net sales grew 5% to exceed $1.8 billion. Unit volume increased 1%, and pricing, favorable sales mix and productivity boosted operating profits 28% to $148 million.

After-tax earnings from joint ventures totaled $73 million in 2007, an increase of 6% led by strong earnings growth for Cereal Partners Worldwide (C.P.W.). These results include a restructuring expense of $8 million after-tax in both years related to the C.P.W. plant restructuring under way in the United Kingdom.

Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.








The views expressed in the comments section of Food Business News do not reflect those of Food Business News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.