General Mills Inc. (GIS), a manufacturer of branded and packaged consumer foods, said Thursday that its current estimate of earnings per share for the first quarter has exceeded internal plan targets, reflecting growth generated by its portfolio of leading food brands and a recovery in margins that was reduced a year ago by sharp input-cost inflation.
General Mills, like others in the food industry, had been hurt in recent years by high commodity costs for key ingredients like grain and other production necessities like fuel. The company had been pushing through price increases to recover the high input costs. As a result, it, along with other food companies, is reaping the benefit of the same after the prices for commodities like wheat and oil have declined of late.
Minneapolis, Minnesota-based General Mills' 2010 first quarter ended on August 30, 2009, and the company plans to report its financial results for the quarter on September 23, 2009. On average, sixteen analysts polled by Thomson Reuters expect the company to report earnings of $1.02 per share for the quarter. Analysts' estimates typically exclude special items.
The company's announcement comes ahead of the Barclays Capital Back-to-School Consumer Conference in Boston, Massachusetts on Thursday morning.
In early July, General Mills reported a 93.7% rise in profit for the fourth quarter from the year-ago period, reflecting primarily higher U.S. retail net sales and a mark-to-market valuation gain on certain commodity positions. The maker of Cheerios cereal, Yoplait yogurt and Progresso soup said its net income for the fourth quarter rose to $358.8 million, or $1.07 per share, from $185.2 million, or $0.53 per share, in the previous-year quarter. Net sales for the quarter increased 5% to $3.65 billion from $3.47 billion in the previous-year quarter.
At that time, General Mills did not provide an earnings outlook for the first quarter of fiscal year 2010, but said it expects earnings for the full year between $4.20 and $4.25 per share, assuming no mark-to-market impact in the year. The guidance includes estimated negative foreign exchange effects of approximately $0.15 per share, and represents growth of 6%-7% from the company's fiscal 2009 adjusted earnings per share of $3.98. Analysts expect the company to report earnings of $4.26 per share for the year.
Among others in the industry, packaged foods company ConAgra Foods Inc. (CAG) is slated to report its financial results for the first quarter on September 22, 2009. Analysts expect the company to report earnings of $0.34 per share for the quarter on revenues of $3.09 billion.
Food products maker J.M. Smucker Co. (SJM) in August reported that its profit for the first quarter more than doubled from last year, driven by strong double-digit sales growth, mainly on the addition of Folgers Coffee Co. that it acquired last year. The company's net income for the first quarter rose to $98.06 million, or $0.83 per share, from $42.29 million, or $0.77 per share, in the year-ago period. Net sales for the quarter grew 58% to $1.05 billion from $663.66 million in the prior-year quarter.
For fiscal 2010, J.M. Smucker had said it continues to expect earnings in a range of $3.65-$3.80 per share, excluding merger and integration costs of $0.17 to $0.19 per share. The company also maintained its outlook for full-year net sales of about $4.5 billion. Analysts expect earnings of $3.83 per share on revenues of $4.56 billion for the year.
GIS closed Wednesday's trading session at $60.54. In Thursday's pre-market trading, the stock is trading at $61.50, up $0.96 or 1.59%. In the past 52 weeks, the stock has been trading in a range of $46.37-$72.01.
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