General Mills’ quarterly profit almost doubles

updated 9:23 a.m. ET July 1, 2009

MINNEAPOLIS - General Mills Inc. said Wednesday that its fiscal fourth-quarter profit almost doubled as consumers flocked toward the food maker’s well-known brands such as Cheerios cereal and Yoplait yogurt.

Adjusted earnings per share beat Wall Street estimates, although sales came in slightly short. The company also offered earnings guidance for 2010 above analysts’ expectations.

Chairman and CEO Ken Powell said in a statement that the recession has prompted shoppers to purchase many of its food brands. Increased marketing efforts, which were implemented by the food maker to highlight its brands for shoppers who may be tempted to switch to cheaper store brands, appeared to pay off.

“In today’s very challenging economic environment, our leading food brands offer the quality, convenience and value that consumers are looking for and, as a result, our businesses are showing strong growth,” he explained.

The Golden Valley, Minn.-based company earned $358.8 million, or $1.07 per share, for the three months ended May 31, up from $185.2 million, or 53 cents per share, a year ago.

Excluding restructuring charges, a loss on some product lines that were sold and other items, profit was 86 cents per share.

Analysts surveyed by Thomson Reuters, whose estimates generally exclude one-time items, forecast earnings of 81 cents per share.

Quarterly sales rose 5 percent to $3.65 billion from $3.47 billion, helped by an extra week in the period. Still, sales fell short of Wall Street’s estimate of $3.69 billion.

Many of the company’s segments posted double-digit sales growth including Yoplait, Big G cereals and Pillsbury USA.

Results were not as strong overseas, dropping 5 percent due to the stronger dollar.

For the year, net income edged up to $1.3 billion, or $3.80 per share, from $1.29 billion, or $3.71 per share, in the prior year. Annual sales climbed 8 percent to $14.69 billion from $13.65 billion.

The company says 2010 earnings will be in a range of $4.20 to $4.25 per share, which is above the $4.18-per-share estimate of analysts polled.

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