September 23, 2011

General Mills profit declines as costs rises

General Mills profit falls 14% during the first quarter amid higher ingredient and fuel costs.

For the quarter ended August 28, the company had earnings of US$405.6 million, equal to US$0.63 per share on the common stock, which compared with earnings of US$472.1 million or US$0.73 per share, during the same quarter of the previous year. Sales for the quarter were US$3.8 million, up 9% from US$3.5 billion during the same quarter of the previous year.

"Our net sales grew 6% before the Yoplait acquisition, with gains across all three of our business segments," said Ken Powell, chairman and chief executive officer. "This reflects good net price realization, resilient consumer demand for our established products, and good early response to new items launched during the quarter. This start to the year has General Mills on track to achieve the key growth targets we've set for fiscal 2012."

Operating profit for the US Retail segment during the quarter was US$585.2 million, down 5% from US$614.6 million during the same quarter of the previous year. Sales for the segment were US$2.51 billion, up 3% from US$2.44 billion.

The Bakeries and Foodservice segment posted operating profit of US$61.4 million, down 15% from US$72.5 million during the same quarter of the previous year. The segment had sales of US$481 million, up 13% from US$426.7 million.

The company also reaffirmed its full-year fiscal 2012 guidance of earnings per share of US$2.59 to US$2.61, excluding market-to-market effects and integration costs for the Yoplait acquisition.