General Mills earnings up 1% in quarter

by FoodBusinessNews.net Staff
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MINNEAPOLIS — For the second quarter ended Nov. 25, General Mills, Inc. posted net earnings of $390,500,000, equal to $1.19 per share, up 1% from $385,400,000, equal to $1.12 per share, during the same quarter of the previous year.

Sales for the quarter were $3,703,400,000, up 7% from $3,466,600,000 during the same quarter of the previous year.

"Our worldwide operations are continuing to generate good growth in fiscal 2008," said Ken Powell, chief executive officer. "Each of our three business segments reported net sales gains for the second quarter and first half. And segment operating profits were up 4% through the first six months despite significant input cost inflation, recall expenses and double-digit growth in our consumer marketing investment. This performance has us on track to achieve our full-year growth targets."

In the U.S. Retail segment, operating profit was $583,800,000, down 2% from $595,600,000 during the same quarter of the previous year. The company said product recall expenses negatively impacted operating profit by $20 million in the quarter. Sales for the segment were $2,521,000,000, up 3% compared with $2,441,700,000 during the same quarter of the previous year. The snacks and Yoplait divisions drove sales growth in the U.S.

In the International segment, operating profit was $84,300,000, up 36% compared with $61,900,000 during the same quarter of the previous year. Sales for the segment were $665,700,000, up 20% compared with $544,600,000 during the same quarter of the previous year.

In the Bakeries and Foodservice segment, operating profit was $48,000,000, down 14% from $56,100,000 during the same quarter of the previous year. Sales for the segment were $516,700,000, up 8% from $480,300,000.

For the six months ended Nov. 25, General Mills posted net earnings of $679,400,000, up 4% from $652,300,000 during the same period of the previous year. Sales for the six months were $6,775,400,000, up 7% from $6,327,000,000 during the same period of the previous year.

Looking ahead, the General Mills anticipates input cost inflation will be higher in the second half of the year than the first half, and full-year inflation will be more than originally estimated. Yet as the result of above-plan results in the first half as well as pricing and increased productivity savings, this cost pressure should be offset. The company reaffirmed its earnings per share guidance for fiscal 2008 of $3.39 to $3.43.

"We expect our good sales momentum to continue, with contributions from additional new product introductions, selected pricing actions and ongoing investment in brand-building activities," Mr. Powell said. "For the year in total, we now estimate that our net sales will grow at the mid-single digit rate, exceeding our long-term goal of low single-digit sales growth."

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