* Says its U.S. retail sales growth to moderate in 2010
* Comfortable with Reuters EPS est of $4.15 for FY 2010
* Stock up 3.6 percent
(Adds analysts', company comments, background, stock price,
byline, CHICAGO to dateline)
By Ian Sherr
CHICAGO, June 8 General Mills Inc (GIS.N) said
it expected fiscal 2009 earnings to exceed its prior outlook by
several cents due to lower operating costs and a lower
quarterly tax rate, sending its shares up 3.6 percent.
The prior forecast from the maker of Cheerios cereal and
Yoplait yogurt was a range of $3.87 to $3.89 a share, excluding
"The company's been in the penalty box since last quarter,
which they missed," said Edward Aaron of RBC Capital Markets.
"Our view is that this positive piece of news takes the stock
... and gives it some room to play catch-up given its recent
Sales were up 10 percent in the first nine months of the
company's fiscal year, with volume increasing 4 percent.
The company attributed that growth to investments in
product innovation. Last month, it introduced gluten-free
versions of its Chex cereal brand.
General Mills also said its U.S. retail net sales growth
was expected to moderate in 2010 from the 2009 levels when
rising costs required higher prices by food manufacturers.
General Mills now expects 2010 costs to be lower and retail
net sales gains to be volume-driven with little contribution
As a result of the new forecast, BMO Capital Markets raised
its target for the company to $63, and Barclays Capital raised
its target price to $59.
The company said it would provide a specific outlook for
2010 on July 1, but it was comfortable with the current Reuters
mean consensus earnings-per-share estimate of $4.15 for fiscal
General Mills stock rose $1.89, or 3.62 percent, to $54.04
in late morning trading on the New York Stock Exchange.
(Additional reporting by Esha Dey in Bangalore; Editing by