Excluding charges, General Mills posts strong Q2

by Eric Schroeder
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MINNEAPOLIS — Net income at General Mills, Inc. in the second quarter ended Nov. 23 eased 3% to $378.2 million, equal to $1.14 per share on the common stock, which compared with earnings of $390.5 million, or $1.19 per share, in the same period a year ago. But excluding a $269 million charge on commodity positions and a $129 million gain on the sale of its Pop Secret microwave popcorn business, profit totaled $1.36 per share, up from $1.11 per share in the second quarter of fiscal 2008. As a result, company executives raised the full-year earnings outlook to $3.83 to $3.87 per share from an earlier forecast of $3.81 to $3.85.

Net sales for the quarter were $4,010.8 million, up 8% from $3,703.4 million during the same quarter of the previous year.

"We’re continuing to see a strong consumer demand for our products in markets around the world," said Ken Powell, chairman and chief executive officer. "Our segment operating profit margin held steady despite higher input costs and the double-digit increase in consumer marketing to support our brands. Performance through the first half of 2009 has us solidly on track to deliver strong sales and earnings growth for the year."

The U.S. Retail segment had an operating profit of $638.3 million, up 9% from $583.8 million during the same quarter of the previous year. Sales for the segment were $2,785.1 million, up from $2,521 million during the same quarter of the previous year.

Net sales for Big G cereals grew 8%, while Pillsbury USA rose 12% led by Totino’s pizza and pizza rolls, and key Pillsbury refrigerated dough products.

The Baking Products division saw sales climb 16% behind strong gains in Betty Crocker dessert mixes and Gold Medal flour.

The company’s Snacks division sales matched year-ago levels despite the absence of Pop Secret sales in the most recent quarter. Meanwhile, the Yoplait division posted sales growth of 14%, reflecting continued good performance by Yoplait Light, Yo-Plus and Fiber One yogurts.

The International segment had an operating profit of $79.7 million, down 6% from $84.3 million during the same quarter of the previous year. Sales for the segment were $676.2 million, up 2% from $665.7 million during the same quarter of the previous year.

The Bakeries and Foodservice segment had an operating profit of $63.9 million, up 33% from $48 million during the same quarter of the previous year. Sales for the segment were $549.5 million, up from $516.7 million.

For the six months ended Nov. 23, net income totaled $656.7 million, or $1.96 per share, down 3% from $679.4 million, or $2.04 per share, in the first half of fiscal 2008. Net sales were $7,508.2 million, up 11% from $6,775.4 million.

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