General Mills Inc (GIS) Quarterly Report
Tuesday, June 29, 2010



GIS products

General Mills Inc (GIS) forecast fiscal 2011 earnings below Wall Street expectations, sending the food maker's shares down more than 4 percent.

The maker of Cheerios cereal, Yoplait yogurts and other foods met analyst predictions for the quarter but forecast full-year guidance just below expectations, and its shares fell in after-hours trading.

General Mills said it earned $211.9 million, or 31 cents per share, for the quarter that ended May 31. That's down from $358.8 million, or 53 cents per share, in the same quarter last year.

Excluding one-time items, the company earned 41 cents per share this year. That compares with an adjusted 43 cents per share a year earlier, after accounting for the company's two-for-one stock split during the quarter this year.

General Mills' revenue fell 2 percent to $3.57 billion, hurt by an extra week in last year's fourth quarter and the costs of ending some product lines.

general mills

Analysts polled by Thomson Reuters, who typically exclude one-time items, expected the company to earn 41 cents per share on revenue of $3.55 billion.

Chief Financial Officer Don Mulligan said the company's outlook assumes no earnings-per-share growth for the current first quarter, but the full-year forecast is in line with its long-term model.

General Mills leaders said it was difficult to see the company's operating performance in the quarter but volumes rose in all its segments. They expect the momentum to continue into 2011, and they plan to discuss their long-range goals at an investor conference on Thursday.

The company saw strong sales of its cereals and snacks both in the U.S. and abroad. But its bakery and food service business continued to suffer, with revenue dropping nearly 12 percent.

General Mills margins fell and costs rose during the quarter as it raised spending on marketing its expanding selection of products.

"We feel next year will be another good year across the segments," General Mills CEO Ken Bowell said. "We think the consumer mindset very much favors our categories."

For the full year, the company's income grew to $1.5 billion, or $2.24 per share, compared with $1.3 billion, or $1.90 per share in the prior year. Excluding one-time items, the company earned $2.30 per share for the year, compared with $1.99 per share last year.

GIS-june29,2010

Revenue grew 1 percent to $14.8 billion for the fiscal year.

General Mills said that, looking forward, it expects to earn between $2.46 per share and $2.48 per share, excluding one-time items, for fiscal 2011. Analysts forecast $2.50 per share.

General Mills shares fell 4.5 percent to $35.25 after closing at $36.90, down 1.3 percent in the regular session on the New York Stock Exchange.

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