Shares of branded consumer food manufacturer and marketer, General Mills Inc. (NYSE: GIS) edged up on Wednesday after the company reported better-than-expected fiscal second-quarter earnings thanks to strong revenue growth, boosted its latest acquisitions of Yoki Alimentos business in Brazil and Yoplait Canada. The company also slightly lifted its outlook on full-year earnings even as it foresees a higher tax rate and higher ingredient costs.
General Mills, known for its Progresso Soups, Hagen Dazs ice cream and Cheerios cereal, said that it expects cost of ingredients would rise at the higher end of its 2 to 3 percent forecast as severe drought in Midwest, earlier this year, pushed up the prices of corns and other gains.
Moreover, the Company also expects higher tax rate during the second half of this fiscal year compared to the first half.
The company also stressed a possible currency devaluation in Venezuela could dent its revenue growth in second of the fiscal year.
“As we move into the second half, the global operating environment remains challenging,” said Chief Executive Ken Powell in a statement to analysts and investors.
For the fiscal second quarter ended November 25, net earnings came at $541.6 million or 82 cents a share, up from $444.8 million or 67 cents a share, in the year earlier quarter.
After excluding onetime expenses (non-GAAP earnings), EPS stood at 86 cents a share, beating analysts’ consensus estimate for 79 cents a share.
Sales during the period climbed 6 percent to $4.88 billion—which was in-line with analysts’ expectation. Sales were partially boosted due to acquisition of Yoki Alimentos business in Brazil.
Net sales at Company’s international segment leaped 19 percent to $1.38 billion while net sales at bakeries and foodservice segment fell 1 percent to $515.6 million due to lower volume.
Looking ahead the Minnesota based Company now expects full-year earnings to come in the range of $2.65 a share to $2.67 a share, after excluding restructuring, integration costs and tax benefits, slightly better than its initial forecast for earnings of $2.65 a share.
Recent Comments