General Mills income up 35% in quarter

by Staff
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MINNEAPOLIS — Acquisitions and international strength contributed to a 35% increase in earnings at General Mills, Inc. during the first quarter.

For the quarter ended Aug. 26, the company had earnings of $548.9 million, equal to 84c per share on the common stock, which compared with $405.6 million, or 63c per share, during the same quarter of the previous year. The most recent results included a 7c per share benefit from mark-to-market valuation of certain commodity positions, and a 10c net benefit related to a discrete tax item. The benefits partially were offset by 1c per share in charges related to restructuring actions taken during 2012 and acquisition-related integration expense.

Sales for the quarter were $4,051 million, up 5% from $3,847.6 million during the same quarter of the previous year.

“Results for the first quarter were broadly consistent with our plans and included sequential improvement in our volume and gross margin trends from the fourth quarter of 2012,” said Ken Powell, chairman and chief executive officer.

Operating profit for the U.S. Retail Segment was $575.1 million, down 2% from $585.2 million during the same quarter of the previous year. Sales for the segment were $2,493.9 million, down 1% from $2,510.3 million during the same quarter of the previous year.

General Mills said its snacks, baking products, meals and Small Planet Foods divisions each recorded net sales gains in the first quarter, while sales for Big G, frozen foods and Yoplait declined.

The Bakeries and Foodservice segment had an operating profit of $67.7 million, up 10% from $61.4 million during the same quarter of the previous year. The segment had sales of $471.6 million, down 2% from $481 million during the same quarter of the previous year. Pound volume in the segment contributed 2 percentage points of net sales growth, while price realization and mix reduced net sales growth by 4 points.

Operating profit within the International segment rose 56% to $125.8 million from $80.7 million, while sales increased 27% to $1,085.5 million from $856.3 million. On a constant currency basis, net sales increased 51% in Europe, 28% in Canada and 20% in both Latin America and the Asia/Pacific region, the company said.

General Mills launched more than 100 new products during the first quarter of fiscal 2013, including Apple Cinnamon Chex and Fiber One Nutty Clusters & Almonds cereal, Nature Valley Protein Bars, Green Giant Seasoned Steamers vegetables, and Progresso Recipe Starters cooking sauces.

“In our core U.S. market, we are seeing slow improvement in price and volume trends across our retail food categories,” Mr. Powell said. “As we move into the second quarter, we’ll be putting full advertising support behind our new items, and we have planned strong levels of in-store merchandising across our product categories. Outside the U.S., our established international businesses are showing good momentum and beginning in the second quarter results will include incremental contributions from Yoplait Canada and Yoki Alimentos in Brazil.”

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