General Mills Profit Beats Estimates, Volume Flat
General Mills posted a higher-than-expected quarterly profit, helped by sales of new items such as chocolate Cheerios cereal and the company’s continuing focus on cost cuts.
The better-than-expected results were also supported by lower commodity costs, even as as General Mills [GIS 72.98 -0.59 (-0.8%)] boosted advertising and media spending 33 percent.
The company also raised its full-year earnings forecast, though the new forecast was a hair below analysts estimates.
Sales volume during the quarter was flat, the latest sign of pressure on branded food makers as consumers buy lower-priced private-label items. The divestment of some products cut volume 1 percentage point, the company said.
The company, which also makes Yoplait yogurt and Progresso soup, posted a profit of $332.5 million, or 96 cents a share, for the third quarter that ended Feb. 28, compared with $288.9 million, or 85 cents a share, a year earlier.
Excluding one-time items, earnings were 97 cents a share. Analysts on average had forecast 93 cents, according to Thomson Reuters.
Sales rose 2.6 percent to $3.63 billion.
For the year, General Mills now sees earnings of $4.57 to $4.59 a share, excluding one-time items. That compares with its previous forecast of $4.52 to $4.57 and with analysts’ estimates of $4.60.