* Second-quarter adjusted profit/share $0.83 vs est. $0.88
* Sales fall marginally to $4.88 bln vs est. $4.94 bln
* Expects 2014 profit at low end of $2.87-$2.90/shr forecast
By Siddharth Cavale
Dec 18 General Mills Inc reported
lower-than-expected quarterly earnings as ingredient costs rose
and U.S. sales of its ready-to-eat meals and frozen foods fell,
and it said full-year profit could come in at the low end of its
The company said sales in its U.S. retail business, its
largest by revenue, fell 1 percent in the second quarter.
The frozen food business includes Green Giant frozen
vegetables and the ready-to-eat meals business includes Cheerios
cereals and Progresso soup.
U.S. retail operating profit fell 6 percent in the quarter
ended Nov. 24 as energy and dairy costs rose.
"The period included the highest quarterly input cost
inflation we expect to see this fiscal year," Chief Executive
Ken Powell said in a statement.
Powell also said food and beverage industry sales in the
United States and other developed markets slowed a bit during
General Mills, which also makes Betty Crocker dessert mixes
and Yoplait yoghurt, has been facing increasing competition from
cheaper private label foods as consumers look for discounts amid
lingering economic uncertainty.
The company, on a conference call with analysts on
Wednesday, reaffirmed its 2014 sales growth forecast and said it
expected mid to high single-digit growth in operating profit in
the back half of the year.
It maintained its adjusted profit forecast of $2.87-$2.90
per share for the year ending May, but said the impact of
foreign currency could be greater than previously expected.
The possible devaluation of the Venezuelan bolivar was
likely to reduce earnings to the low end of its forecast range,
the company said.
Net income rose to $550 million, or 84 cents per share, in
the second quarter, from $541.6 million, or 82 cents per share,
a year earlier.
Excluding items, the company earned 83 cents per share.
Net sales at the company, which also owns Old El-Paso
Mexican foods and Haagen-Dazs ice creams, fell slightly to $4.88
Analysts on average had expected earnings of 88 cents per
share on revenue of $4.94 billion, according to Thomson Reuters
The Minneapolis, Minnesota-based company's shares closed
marginally higher at $49.73 on the New York Stock Exchange on