UPDATE 4-General Mills profit tops view; '10 outlook strong

* Q4 EPS ex-items $0.86 vs Street view $0.80

* Q4 sales up 5 percent

* Sees fiscal 2010 EPS $4.20-$4.25, Street EPS view $4.17

* General Mills shares up 3.1 percent (Adds CEO, analyst comments, details on rivals)

By Aarthi Sivaraman

NEW YORK, July 1 (Reuters) - General Mills Inc (GIS.N), forecast better-than-expected earnings for the current fiscal year, helped by new products and moderating commodity costs.

The company also posted quarterly earnings that beat analysts' average estimate as consumers continued to buy products like Pillsbury baking dough and Cheerios cereal.

The news sent General Mills shares up more than 3 percent to $57.87 in midday trade on the New York Stock Exchange.

The company said it is set to add products to its brands such as Progresso, Yoplait, and Wanchai Ferry frozen entrees.

But General Mills, which like most of food companies raised prices last year to combat then-soaring commodity coasts, said it saw "little" price increases in this fiscal year.

It also plans to boost marketing spending by the high-single digits as it works to polish its appeal to consumers who are cooking more to save money in the recession.

"More consumers than ever are going into the grocery stores and they are looking for new ideas and innovation," General Mills Chief Executive Ken Powell said in an interview. "This is a great time to launch new products. We've gone full steam ahead on innovation."

While the trend to eat at home is helping its retail segment, sales have suffered at its bakeries and food service unit, which caters to restaurants and bakeries.

For fiscal year 2010, ending in May, General Mills expects net sales to be "comparable" to 2009, when it posted sales of about $14.7 billion.

The company forecast earnings of $4.20 per share to $4.25 per share for the year, excluding the impact of commodity costs. Analysts had expected $3.17 per share.

At least one analyst was surprised about the food maker's outlook.