Photo courtesy of General Mills
General Mills' Golden Valley headquarters
The company, which also reiterated its earnings guidance and expects strong international growth for the current fiscal year, saw its stock rise almost 2 percent following its announcement.
February 19, 2013
Food giant General Mills, Inc., said Tuesday that it expects profits to rise in the “high single-digit” percentage range in fiscal 2014—news that sent its stock up almost 2 percent.
“We are completing a two-year period of significant investment that strengthened our business in our core U.S. market and meaningfully expanded our base in international markets,” company Chairman and CEO Ken Powell said in a statement. “Our focus now is on integrating the new operations and executing well across the entire company. We see stronger growth in our immediate future.”
Analysts polled by Bloomberg project General Mills’ earnings per share to increase roughly 8 percent to $2.90 for the fiscal year ending in May 2014.
Golden Valley-based General Mills also expects to return more cash to shareholders in fiscal 2014 through share repurchases and dividend growth. Repurchases are expected to reduce the average number of diluted shares outstanding by 2 percent during that period.
The recent announcements were made in conjunction with a Tuesday presentation by General Mills executives at the Consumer Analyst Group of New York investor conference.
In addition to discussing plans for fiscal 2014, General Mills also reiterated its earnings guidance for the current fiscal year, which ends in May. The company in December boosted its guidance to $2.65 to $2.67 per share before certain items—up from a solid $2.65 per share that was previously anticipated. Analysts polled by Bloomberg predict $2.68 per share.
By contrast, for the fiscal year that ended in May 2012, the company reported earnings per share of $2.56 before certain items.
Meanwhile, General Mills has high hopes for its international operations. It expects net sales from such operations to exceed $5 billion in the fiscal year ending in May of this year.
Net sales from international operations totaled about $4.2 billion for the fiscal year that ended in May 2012—up substantially from roughly $2.9 billion for the fiscal year that ended a year earlier.
General Mills has made two major international acquisitions in recent years. Last year, it paid $939.8 million for Brazilian food maker Yoki Alimentos, and in 2011, it purchased a 51 percent stake in Paris-based yogurt company Yoplait S.A.S.
According to Dow Jones newswire, Powell said at the Consumer Analyst Conference, “We would expect a more normal flow of M&A activity than the last couple of years, which everyone knows was a bit unusual for us.”
General Mills’ retail sales segment, which reported about $10.5 billion in net sales for the fiscal year that ended in May 2012, is expected to achieve “low single-digit sales growth and stronger operating profit growth in fiscal 2013,” the company said.
Shares of General Mills’ stock were trading up about 1.7 percent at $45.35 early Tuesday afternoon.
In December, General Mills reported a 22 percent jump in profits for the second quarter
, which ended November 25. Profits for the period totaled $541.6 million, or 82 cents per share—up from $444.8 million, or 67 cents per share, for the same period last year. Analysts polled by Thomson Reuters were expecting 79 cents per share.
General Mills is among Minnesota’s 10-largest public companies
based on revenue, which totaled $16.7 billion in fiscal 2012.
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