Packaged food supplier General Mills, Inc. (GIS) reaffirmed Tuesday its adjusted earnings and revenue guidance for the full-year 2012. This was revealed by CFO Don Mulligan during a presentation at the Barclays Capital Americas Select Franchise Conference today in London, England.
The Minneapolis, Minnesota-based maker of Cheerios and Fiber One cereals said it continues to expect adjusted earnings guidance for fiscal 2012 in a range of $2.53 to $2.55 per share.
On average, 19 analysts polled by Thomson Reuters currently expect the company to report earnings of $2.54 per share for the full-year 2012. Analysts' estimates typically exclude special items.
The result excludes mark-to-market effects and integration costs related to the acquisition of a controlling interest in Yoplait S.A.S. The company acquired a 51 percent controlling interest in Yoplait S.A.S. and a 50 percent interest in Yoplait Marques S.A.S. for $1.2 billion in July 2011.
The company also added that it still anticipates double-digit growth in net sales, with significant contribution from the acquired French yogurt maker Yoplait International, and net price realization on base business.
It also continues to project gross margin for the year to be below year-ago levels due to 10 to 11 percent input cost inflation. Segment operating profit is also seen to grow, despite increased media investment.
Detailing on the company's long-term growth model established in 2006, Mulligan said he anticipates low single-digit compound growth in net sales, mid single-digit growth in segment operating profits and high single-digit growth in earnings per share. Total shareholder returns will grow in double digit.
The company's fiscal year ends in May. Since 2006, earnings have grown at a compound annual growth rate, or CAGR, of nearly 6% while per share earnings have improved at a CAGR of 8.5%.
While reporting third-quarter financial results in March, Chairman and CEO Ken Powell stated, "Our third-quarter results reflect strong worldwide sales growth for our business, but the 10-11 percent input cost inflation we're experiencing this year pressured our margins."
For the third quarter, the company reported a profit that edged down from last year as continuing rise in commodity costs ate into its margins. The branded foods giant noted then that its fiscal 2012 is seeing the highest level of commodity inflation in 30 years.
Like most packaged food companies, General Mills is witnessing improvement in sales with economic uncertainties forcing families to stick largely to eat-at-home habit. However, higher commodity costs and other production necessities like fuel continue to hit margins of the company.
In Tuesday's regular trading session, GIS is currently trading at $39.49, up $0.21 or 0.52% on a volume of 1.98 million shares.
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