General Mills reports 1.8% increase in 2013 Q3 net earnings

US-based food company General Mills has reported that its net earnings for the third quarter of 2013 increased 1.8% to $398.4m, compared with $391.5m for the same period in 2012.

The modest growth in profit was due to one-time charges and margin pressure that were more than offset by higher overseas sales, primarily from its new businesses, Yoki and Yoplait Canada.

Net sales for the quarter ended 24 February 2012 increased 7.5% to $4.43bn, compared to $4.12bn in the previous year.

General Mills chairman and CEO Ken Powell said the third-quarter results reflected gains across the company’s worldwide operations.

"Our sales and volume growth reflects contributions from new businesses and from established products," Powell said.

"Operating profit results for the quarter were particularly good, with double-digit increases for both our US Retail and Bakeries and Foodservice segments," Powell added.

In the US retail segment, net sales increased 2.1% to $2.66bn, compared with $2.6bn in 2012, driven by net price realisation and mix, while operating profit rose 12.6% to $577.3m, compared with $512.5m in the previous year period.

Divisions such as Snacks, Small Planet Foods, Baking Products and Meals posted a rise in net sales; Frozen Foods sales matched year ago levels, while sales of Big G and Yoplait declined.

International segment net sales increased 24.5% to $1.29bn, compared with $1.04bn in the earlier year, while operating profit including the impact of Venezuelan currency devaluation matched the prior-year results at $96m.

In the Bakeries and Foodservice segment, there was a marginal rise in net sales to $469.9m, while operating profit increased 13% to $75.4m, reflecting favourable mix, lower manufacturing costs, and increased grain merchandising earnings.

For the fourth quarter, General Mills expects supply chain costs to be above year-ago levels.

For fiscal 2013, the company continues to estimate input cost inflation of 3%, and adjusted diluted earnings per share (EPS) in the range of $2.66 to $2.68, excluding mark-to-market impact, a net tax benefit recorded in the first quarter, and restructuring and integration costs.

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Image: General Mills’ modest growth in profit for the third quarter was due to one-time charges and margin pressure that were more than offset by higher overseas sales. Photo courtesy of General Mills Inc.