General Mills raises 2008 and 2010 profit outlooks

by Eric Schroeder
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MINNEAPOLIS — General Mills, Inc. on Tuesday raised its fiscal 2008 earnings guidance to a range of $3.45 to $3.47 per share, up from its earlier estimate of $3.39 to $3.43. The company said strong net sales growth and successful cost-saving efforts are helping counter higher input costs. In fiscal 2007, the company earned $3.18 per share.

General Mills also raised its longer-term growth targets, predicting 2010 net income of more than $4.05 per share, up from its previous forecast of $4 per share. Net sales in 2010 are expected to exceed $14 billion, up from an earlier forecast of $13.2 billion.

The forward looking projections are part of a long-term earnings growth model established by General Mills at the end of fiscal 2005. The model calls for low-single digit compound annual growth in net sales, mid single-digit compound growth in segment operating profits, and high single-digit compound growth in earnings per share. The company also set specific targets for sales, segment operating profit and earnings per share in fiscal 2010. Actual performance since 2005 has generally exceeded the average annual growth rates required to achieve these original 2010 targets.

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