General Mills quarterly profit beat Wall Street estimates and the Cheerios cereal maker raised its full-year forecast, benefiting from its efforts to cut costs and raise prices, sending its shares up 6% on Wednesday.
Consumer goods companies like General Mills have been raising product prices to make up for rising commodities and transportation costs.
"Our year-to-date performance and fourth-quarter plans give us confidence that we will meet or exceed all of our key fiscal 2019 targets," Jeff Harmening, chief executive officer said in a statement.
Gross Margin Increases
The company's adjusted gross margin rose 170 basis points to 34.2% in the third quarter and beat the analyst average estimate of 32.89%.
General Mills, which owns dessert pre-mix brand Betty Crocker and Nature Valley granola bars, said it expects adjusted profit for fiscal 2019 to be between flat and 1% from a prior forecast range of flat to down 3%.
The company's net sales rose 8% to $4.20 billion in the third quarter, largely in line with expectations of $4.19 billion, according to IBES data from Refinitiv.
Excluding one-time items, the company earned 83 cents per for the quarter ended Feb.24 to beat expectations of 69 cents.