* Adjusted profit 86 cents/share vs Street view 79 cents
* Sees higher ingredient costs, higher tax rate
* Shares up 1.4 pct in premarket trading
By Martinne Geller
Dec 19 General Mills Inc posted
higher-than-expected quarterly earnings on Wednesday but raised
its full-year outlook only slightly as it sees higher ingredient
costs, a higher tax rate and a possible currency devaluation in
The foods maker behind Cheerios cereal, Progresso soups and
Haagen Dazs ice cream said it expects ingredient cost inflation
at the high end of its 2 percent to 3 percent forecast due to
the summer drought in the U.S. Midwest that pushed up prices for
corn and other grains.
In addition, General Mills expects a higher tax rate in the
second half of its fiscal year than in the first half, and it
said a currency devaluation was possible in Venezuela.
"As we move into the second half, the global operating
environment remains challenging," said Chief Executive Ken
General Mills shares were up 1.4 percent at $42.35 in
"They took a more cautious outlook," said Morningstar
analyst Erin Lash.
In the company's fiscal second quarter, ended Nov. 25, net
earnings rose to $541.6 million, or 82 cents per share, from
$444.8 million, or 67 cents per share, a year earlier.
Excluding one-time items, earnings were 86 cents per share,
topping analysts' average estimate of 79 cents, according to
Thomson Reuters I/B/E/S.
Sales increased nearly 6 percent to $4.88 billion, meeting
analysts' expectations, helped by the recently acquired Yoki
Alimentos business in Brazil.
The company now expects to earn $2.65 to $2.67 per share in
fiscal 2013, excluding accounting adjustments, a tax benefit and
restructuring and integration costs. Its earlier forecast called
for earnings of about $2.65 per share.