General Mills’ Profit Rises 13%, Meets Expectations
Golden Valley-based General Mills, Inc., met analyst expectations Wednesday for its fourth-quarter earnings, which were fueled largely by international sales and new businesses.
The packaged food retailer announced that net earnings for the fourth quarter, which ended May 26, totaled $366 million, or $0.55 per share, up 13 percent from $325 million, or $0.49 per share during the same period in 2012.
Adjusted earnings per share, which exclude certain tax and currency exchange-related costs, totaled $0.53 per share, which were down from $0.60 during the same period in 2012 but matched what analysts polled by Thomson Reuters had expected.
Revenue, meanwhile, totaled $4.41 billion, up 8 percent from $4.07 billion in the fourth quarter of 2012. Fourth-quarter revenue surpassed analysts’ projections of $4.32 billion. For the full fiscal year, its revenue totaled $17.8 billion, up 7 percent from $16.7 billion in 2012, and earnings totaled $1.86 billion, up 18 percent from $1.57 billion in 2012.
The company’s international sales grew 27 percent during the fourth quarter to $1.4 billion, while international sales for the full fiscal year increased 24 percent to $5.2 billion. Much of this growth came from new businesses, due mainly to the company’s acquisition of Brazilian food company Yoki Alimentos and the Yoplait Canada brand.
“Our 2013 results reflect good growth from established product lines and important contributions from new businesses added during the year,” CEO Ken Powell said in a statement. “Our cash flow from operating activities rose 22 percent, and we returned nearly $1.9 billion in cash to shareholders through dividends and share repurchase activity. In addition, we exited the year with momentum that enabled us to finish 2013 a bit better than our original estimates.”
U.S. retail sales for the quarter grew by 2 percent to $2.5 billion, led by new items such as Honey Nut Cheerios Medley Crunch cereal, Yoplait Greek 100 calorie yogurt, and Nature Valley Protein Bars.
Shares of General Mills’ stock were trading down about 0.6 percent at $48.05 during afternoon Wednesday trading.
Looking to the future, Powell believes new products and innovation for established product lines will help boost performance. “We also will have three months of incremental contribution from Yoki and Yoplait Canada,” Powell said. “In total, we expect our net sales to grow at a low single-digit rate in 2014 to exceed $18 billion.”
The company expects to grow its earnings per share to between $2.87 and $2.90 in 2014, which is lower than analysts’ expectations of $2.93 per share, but would still represent an increase from $2.79 per share in 2013.
General Mills is among Minnesota’s 10 largest public companies based on revenue.