* 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 (Reuters) - 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 trading.
“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 conditions.”
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 percent.
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 fiscal 2014.
General Mills’ shares slipped 25 cents, or 0.5 percent, to $48.11 in morning trading.