Cheerios Cereal Maker General Mills Quarterly Profit Tops Estimates
Cheerios cereal maker General Mills Inc. on Wednesday (27 June) reported a quarterly profit that topped analysts' estimates, as its efforts to reduce costs and improve its distribution network paid off.
Gross margins of the company, which is also known for its Häagen-Dazs and Betty Crocker brands, rose to 36.5% in the fourth quarter from 34.7% a year earlier.
Pet Products Acquisition
General Mills said it expects organic net sales to be in the range of flat to up 1%. Including the impact of its acquisition of pet food snacks maker Blue Buffalo, net sales are expected to rise 9% to 10% from a year earlier.
To counter slowing sales growth in the packaged foods industry, General Mills bought pet snacks maker Blue Buffalo Pet Products for nearly $8 billion earlier this year.
Net earnings attributable to the company fell to $354.4 million, or 59 cents per share, in the three months ended 27 May from $408.9 million, or 69 cents per share, a year earlier.
Excluding certain items, General Mills earned 79 cents per share. Analysts were expecting earnings of 72 cents per share, according to Thomson Reuters I/B/E/S.
Net sales rose 2% to $3.89 billion, in line with analysts estimate.
Shares of the company were up 1.17% in premarket trading.