Minnesota-based Consumer foods producer, General Mills Inc. (NYSE: GIS) reported results for the first quarter of 2013 ended Aug 26, 2012. Shares of GIS rose sharply following the release of first-quarter results.
Net sales increased by 5.3% to $4,051 million from that of $3,847.6 million in Aug 2011. Operating profit increased by 22.1% to $780.1 million from that of $638.9 million. Net income also increased by 39% to $562.1 million from $404.3 million. Net cash from operations for the first quarter 2013 were $488.8 million.
The increase in the revenues was mainly due to the significant increase of 27% in International Sales. GIS introduced over 100 new products during the first quarter of 2013. The Category of products which contributed majority of sales was Cereals, Nutrition Bars, Steamed vegetables, Cooking Sauce and Ice creams. The recent acquisition of Yoplait International had also helped in incremental sales.
The tremendous hike in the operating profit is mainly due to the significant reduction in the cost of sales and general administrative expenses. Net profit rose by 39% because of the 26% reduction in the income tax.
As on Aug 26, 2012, it had total assets worth $22,635.3 million including $1,508.4 million as cash and its equivalents. Total liabilities were $14,690.5 million, among which 41% were current and the remaining was long term. Total stockholders’ equity was 7,093.2 million including $448 million as non controlling interests.
The major corporate event happened in the first quarter was the acquisition of a Brazil based privately held Food Company, Yoki Alimentos S.A. The purchase price of the deal was $940 million including $89 million of non-cash consideration for net debt assumed. The company will include Yoki’s operations in its consolidated financial statements starting Second quarter of 2013.
The company has an average of 650.4 million common shares for basic EPS calculation and 667.4 million common shares for diluted EPS calculation by adding stock options and restricted stock which makes Earning per share (basic) as $0.84 compared to $0.63 in August 2011 and Diluted EPS as $0.82 compared to $0.61 in 2011.
Chairman and Chief Executive Officer Ken Powell had quoted that this is a great start for the company to achieve its Annual 2013 targets. He told that he is happy that the Results for the first quarter were broadly consistent with their plans and included sequential improvement in the volume and gross margin trends from the fourth quarter of 2012.
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