* Q4 adj EPS 53 cents matches analysts' estimates
* Sees '14 EPS $2.87-$2.90 vs Wall Street view of $2.93/shr
* Shares down less than 1 pct in morning trading
By Martinne Geller
June 26 General Mills Inc reported
higher fourth quarter-earnings but gave a forecast for the new
fiscal year that was below Wall Street estimates, citing higher
costs for ingredients and a slow economic recovery.
Shares of the maker of Cheerios cereal, Progresso soup and
other packaged foods fell less than 1 percent in afternoon
"The economic recovery continues to be very slow and we
think the consumer is still quite cautious. And it's very
competitive out there," Chief Executive Ken Powell said in an
interview. "It (the forecast) may be a little prudent for some,
but we think that's probably appropriate given the economic
Even though General Mills saw sales declines for fiscal 2013
in its big cereals, Yoplait and frozen foods business, Powell
said performance improved during the year, and he expects sales
to increase in 2014.
The company said cost management efforts are expected to
offset higher prices for ingredients, which it sees rising 3
In an interview, Chief Financial Officer Don Mulligan said
that the stronger U.S. dollar is having a bigger impact on
earnings than some might have expected, given the company's
growing international exposure.
The company said net income rose to $366.3 million, or 55
cents per share, in its fiscal fourth quarter that ended on May
26, from $325.4 million, or 49 cents per share, a year earlier.
Excluding one-time items such as tax and accounting
adjustments, earnings were 53 cents per share, meeting analysts'
average estimates, according to Thomson Reuters I/B/E/S.
Net sales rose 8.5 percent to $4.41 billion. Analysts
expected $4.32 billion. Growth was fueled by the addition of new
products gained through the acquisitions of Yoki Alimentos in
Brazil and Yoplait International.
Sales in the U.S. retail segment rose 2 percent, although
profits declined due to higher ingredient and merchandising
costs. The international division's sales rose 27 percent, as
the addition of new business more than offset the impact of
lower selling prices and foreign exchange fluctuations.
For fiscal 2014, General Mills forecast earnings of $2.87 to
$2.90 per share. Analysts were expecting $2.93 per share,
according to Thomson Reuters I/B/E/S. The company also forecast
sales would grow at a low single-digit rate and exceed $18
billion. Analysts were expecting $18.40 billion in sales for
General Mills' shares slipped 25 cents, or 0.5 percent, to
$48.11 in morning trading.