Grain News


General Mills Reports 3Q Net Income of $391.5 Million, Down From $392.1 Million in 3Q 2011

Date Posted: March 22, 2012

Minneapolis, MN—General Mills (NYSE: GIS) reported March 21 results for the third quarter of fiscal 2012.

Full General Mills Report

Fiscal 2012 Third Quarter Financial Summary

• Net sales grew 13 percent to $4.12 billion. The international Yoplait acquisition completed in July 2011 contributed 8 points of net sales growth.

• Segment operating profit rose 1 percent to $675 million, including significantly higher input costs year-over-year and increased advertising expense.

• Diluted earnings per share (EPS) totaled 58 cents.

• Adjusted diluted EPS, which excludes certain items affecting comparability of results, totaled 55 cents, one penny below the year-ago level.

Net sales for the 13 weeks ended Feb. 26, 2012 grew 13 percent to $4.12 billion.

Price realization and mix contributed 3 points of net sales growth, and pound volume contributed 10 points of net sales growth, including 13 points of pound volume growth from the Yoplait acquisition.

Foreign exchange did not have a material effect on our sales growth rate in the quarter.

Gross margin as a percent of net sales was below year-ago levels due to higher input costs and the change in business mix to include the Yoplait acquisition.

Advertising and media expense was 8 percent higher in the period.

Segment operating profit rose 1 percent to $675 million.

Third-quarter net earnings attributable to General Mills totaled $392 million and diluted earnings per share totaled 58 cents.

Adjusted diluted earnings per share, which excludes certain items affecting comparability of results year to year, totaled 55 cents for the third quarter of 2012 compared to 56 cents a year ago. (Please see Note 7 to the consolidated financial statements for a reconciliation of this non-GAAP measure.)

Chairman and Chief Executive Officer Ken Powell said, “Our third-quarter results reflect strong worldwide sales growth for our business, but the 10-11 percent commodity cost inflation we’re experiencing this year pressured our margins.

"In the fourth quarter, we expect to generate continued good sales momentum and we anticipate that gross margin contraction will ease somewhat.

"This should result in renewed earnings growth as we wrap up 2012 and move into the new fiscal year.”

Outlook

General Mills reaffirmed its fiscal 2012 adjusted diluted EPS guidance of $2.53 - $2.55.

This guidance excludes mark-to-market valuation effects, and integration costs for the Yoplait acquisition.

“Fiscal 2012 has represented a challenging operating environment, with the highest level of input cost inflation that we’ve seen in 30 years,” Powell said.

“But sales of our leading food brands remain strong in markets around the world, putting General Mills on pace to achieve record-level net sales and adjusted diluted earnings per share.”

For more information, call 763-764-6364.

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