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Last Update: 20-Mar-13 08:29 ET
General Mills lower following Q3 earnings/guidance
General Mills (GIS $46.42) reported third quarter earnings of $0.64 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus Estimate of $0.57; revenues rose 7.5% year/year to $4.43 bln vs the $4.36 bln consensus. Pound volume contributed 9 points of net sales growth, primarily reflecting the addition of Yoki and Yoplait Canada. Volume growth excluding new businesses contributed 1 percentage point of growth.
Net price realization and mix reduced the net sales growth rate by 1 percentage point. Foreign currency exchange did not have a material effect on sales growth in the quarter. Gross margin was below year-ago levels primarily reflecting higher input costs. Total marketing spending in the quarter was weighted toward in-store promotional support for new product introductions and established brands; advertising and media expense was below strong year-ago levels. Total segment operating profit increased 11 percent to $749 million.
The company issued in-line guidance for the fourth quarter, sees EPS of below $0.60 (4Q12), excluding non-recurring items, vs. $0.59 Capital IQ Consensus Estimate. In Q4, General Mills said it expects supply chain costs to be above year-ago levels.
The company continues to estimate fiscal 2013 input cost inflation of 3 percent. Fourth-quarter spending to support in-store merchandising also is expected to be above year-ago levels. Adjusted EPS for Q4 are expected to be below year-ago results that grew 15%.
The company raised fiscal year 2013 EPS to $2.66-2.68 from $2.65-2.67 vs. the $2.68 consensus.
"We are continuing to see slow, but steady, improvement in the operating environment. Trends in our established businesses are improving, and integration of our new businesses is going smoothly. We're preparing to launch a promising slate of new products as our new fiscal year begins this summer, and our plans for fiscal 2014 call for high single-digit EPS growth, consistent with our long-term model (consensus +8.2%)."
Net price realization and mix reduced the net sales growth rate by 1 percentage point. Foreign currency exchange did not have a material effect on sales growth in the quarter. Gross margin was below year-ago levels primarily reflecting higher input costs. Total marketing spending in the quarter was weighted toward in-store promotional support for new product introductions and established brands; advertising and media expense was below strong year-ago levels. Total segment operating profit increased 11 percent to $749 million.
The company issued in-line guidance for the fourth quarter, sees EPS of below $0.60 (4Q12), excluding non-recurring items, vs. $0.59 Capital IQ Consensus Estimate. In Q4, General Mills said it expects supply chain costs to be above year-ago levels.
The company continues to estimate fiscal 2013 input cost inflation of 3 percent. Fourth-quarter spending to support in-store merchandising also is expected to be above year-ago levels. Adjusted EPS for Q4 are expected to be below year-ago results that grew 15%.
The company raised fiscal year 2013 EPS to $2.66-2.68 from $2.65-2.67 vs. the $2.68 consensus.
"We are continuing to see slow, but steady, improvement in the operating environment. Trends in our established businesses are improving, and integration of our new businesses is going smoothly. We're preparing to launch a promising slate of new products as our new fiscal year begins this summer, and our plans for fiscal 2014 call for high single-digit EPS growth, consistent with our long-term model (consensus +8.2%)."
