MINNEAPOLIS — Strong consumer demand for its products drove higher sales and earnings at General Mills, Inc. in the first quarter ended Aug. 30. The results, which beat analysts’ expectations, led the company to raise its full-year earnings outlook and prompted a 6% gain in the company’s share price in early trading on Sept. 23.

Net earnings in the first quarter ended Aug. 30 were $420.6 million, equal to $1.29 per share on the common stock, up 51% from $278.5 million, or 83c per share, in the first quarter of fiscal 2009. Net sales rose 0.6% to $3,518.8 million from $3,497.3 million.

The company raised its 2010 adjusted profit to a range of $4.40 to $4.45 per share, up from $4.20 to $4.25.

"We’re very pleased with this start to the year," said Kendall Powell, chairman and chief executive officer. "We’re seeing continuing strong consumer demand for our products. These good sales levels, combined with the effects of our companywide focus on holistic margin management (H.H.M.), are driving terrific operating performance in our manufacturing plants. In addition, our commodity and fuel costs for the quarter were below year-ago levels, helping us to recover margin that was lost in the same quarter last year. These factors drove first-quarter earnings growth that was well ahead of our expectations."

For the quarter, operating profit in the U.S. Retail segment was $636.7 million, up 21% from $526.3 million during the same quarter of the previous year. The quarter included a 19% increase in advertising and media expense.

Sales for the segment were $2,423.8 million, up 6% from $2,290.3 million during the same quarter of the previous year. General Mills said pound volume contributed 2 percentage points of the sales growth, including a 1 point reduction from the Pop Secret popcorn line that was divested last year.

Net sales for Big G cereals grew 9% in the first quarter, led by Multigrain Cheerios, Fiber One, Trix, Cinnamon Toast Crunch and new gluten-free Chex varieties. The Meals division, meanwhile, posted a 4% increase in sales, including gains from Hamburger Helper and Macaroni Grill dinner mixes, Old El Paso Mexican products, and Green Giant frozen vegetables. Pillsbury sales climbed 12% behind good performance from Totino’s Pizza Rolls, Pillsbury refrigerated cookie dough and Pillsbury Toaster Strudel. Snacks division sales rose 1% behind Natural Valley grain snacks and Fiber One bars, which helped offset the loss from the Pop Secret divestiture. Net sales for Baking Products rose 3% led by gains from Betty Crocker dessert mixes, including new gluten-free items.

The other two segments of U.S. Retail — Yoplait and Small Planet Foods — rose 4% and fell 5%, respectively.

The International segment had an operating profit of $69.7 million for the quarter, down 13% from $79.9 million during the same quarter of the previous year. Sales for the segment were $661.7 million, down 4% from $690.1 million during the same quarter of the previous year.

The Bakeries and Foodservice segment has an operating profit of $61.2 million, up 129% from $26.7 million during the same quarter of the previous year. Sales for the segment were $433.3 million, down 16% from $516.9 million during the same quarter of the previous year.

General Mills recorded restructuring, impairment and other exit items of $1 million in the first quarter, which compared with $3 million in similar expenses during the first quarter of fiscal 2009. Capital expenditures totaled $126 million during the most recent quarter, which compared with $129 million in the same period a year ago.

Looking ahead to the remainder of 2010, Mr. Powell said, "Over the past several years, we’ve focused intently on a business model that uses supply chain productivity, sales mix management, and other cost-savings efforts to protect our margins from the pressure of rising input costs. This helps us limit price increases and also allows us to direct significant resources back into our business, in the form of ongoing product innovation and increased consumer marketing support.

"This reinvestment fuels continuing strong sales trends for our brands, which offer consumers high quality, nutritious and convenient foods at very good values. That’s helping us drive growth for our food categories in markets around the world. This model is working well, it’s sustainable, and so we’re sticking with it."

He said the company plans to invest some of its first-quarter earnings growth in additional 2010 consumer marketing programs.