By RTT News, September 18, 2013, 08:13:00 AM EDT
(RTTNews.com) - Packaged food supplier General Mills Inc. ( GIS ) Wednesday reported first-quarter profit that matched analysts' expectations while revenues topped estimates. The company backed its projection for annual earnings.
Net earnings attributable to the company fell to $459.3 million or $0.70 per share from $548.9 million or $0.82 per share last year.
The prior-year results included a net benefit from a discrete tax item and higher mark-to-market valuation of some commodity positions. Adjusted earnings per share totaled $0.66 last year.
On average, 15 analysts polled by Thomson Reuters expected earnings per share of $0.70 for the quarter. Analysts' estimates typically exclude one-time items.
Net sales rose 7.9 percent to $4.372 billion from $4.051 billion. Analysts estimated revenues of $4.29 billion for the quarter.
Pound volume grew 8 percent, reflecting acquisitions. Price realization and mix contributed 1 point of net sales growth, and foreign exchange subtracted 1 point of growth.
New products contributing to sales growth included Yoplait Greek yogurt, Nature Valley Soft-baked Oatmeal Squares, Honey Nut Cheerios Medley Crunch cereal and Pillsbury gluten-free refrigerated dough products.
General Mills' U.S. Retail segment sales rose 4 percent to $2.58 billion with growth in The Snacks, Big G, Baking Products and Small Planet Foods divisions.
Sales at international businesses climbed 22 percent to $1.32 billion. Net sales in Latin America nearly tripled on a constant-currency basis and constant-currency net sales in Canada rose 21 percent including the Yoplait business that transitioned to direct ownership in September 2012.
CEO Ken Powell said this performance represented a solid start to the new fiscal year. "In particular, our net sales growth in the quarter reflects a healthy mix of gains from established brands, strong introductory shipments for new products, and contributions from new businesses added to our portfolio."
Gross margin fell, reflecting changes in mark-to-market valuation of certain commodity positions, input cost inflation and the change in business mix.
Cost of sales climbed 14 percent to $2.76 billion and income taxes increased 34 percent to $212 million.
Looking forward, the company reaffirmed its fiscal 2014 guidance of adjusted earnings per share of $2.87 to $2.90, low single-digit growth in net sales and mid single-digit growth in segment operating profit. Analysts project annual earnings of $2.92 per share.
GIS closed at $48.98 on Tuesday.
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