General Mills 3Q net income climbs on snack sales
Wednesday, March 23, 2011; 5:36 PM
NEW YORK -- General Mills Inc.'s net income rose 18 percent in the fiscal third quarter, driven by the sale of more snacks and strength abroad.
The maker of Nature Valley snack bars and Cheerios cereal has started to raise prices for some of its products over the past few months to cope with rising ingredient costs. It expects price increases will accelerate during the current fiscal fourth quarter.
Chairman and CEO Ken Powell anticipates that quarter will include the "highest earnings growth of the year."
That expectation led the food company to maintain its 2011 earnings and revenue outlooks Wednesday.
For the period ended Feb. 27, General Mills earned $392.1 million, or 59 cents per share. That's up from $332.5 million, or 48 cents per share, a year earlier.
Adjusted earnings were 56 cents per share, matching the expectations of analysts surveyed by FactSet.
The food maker, which is in exclusive talks to buy a majority stake in French yogurt maker Yoplait, said its quarterly revenue climbed 2 percent to $3.65 billion. Wall Street forecast $3.7 billion.
Revenue for the snack division increased 14 percent, with Nature Valley and Fiber One snack bars among its strongest performers.
Revenue from Yoplait yogurt, which General Mills makes in the U.S. under license from the French company Sodiaal, rose 1 percent. General Mills anticipates the proposed Yoplait transaction will close in the fiscal first quarter of 2012.
The company also saw solid results from its Small Planet Foods natural and organic unit, with revenue up 14 percent. Revenue for the bakeries and foodservice division rose 9 percent.
General Mills said revenue for its U.S. retail business dipped 1 percent.
Better results were reported overseas. International revenue climbed 8 percent to $688 million, powered by strength in the European and Asia/Pacific regions.