General Mills profit halves due to $260 million impairment charge

(Reuters) - General Mills Inc GIS.N, the maker of Cheerios cereal and Betty Crocker cake mixes, said fourth-quarter profit halved as it recorded a $260 million charge to write down the value of one of its frozen and canned vegetable businesses.

The General Mills logo is seen on a box of Cheerios cereal in Evanston, Illinois, June 26, 2012. REUTERS/Jim Young

An assessment of its Green Giant brand showed the business’s market value was now lower than its carrying value, the company said in a statement on Wednesday.

General Mills has put up Green Giant for sale, people familiar with the matter told Reuters in March.

The company’s shares rose 0.5 percent to $56.00 in light premarket trading on Wednesday.

General Mills’ revenue in the quarter missed analysts’ average expectations, mainly due to a strong dollar, but cost cuts helped profit beat estimates in the quarter.

The Minneapolis, Minnesota-based company has been grappling with sluggish sales at home, where changes in eating habits are driving consumers away from some of the main products it sells.

That had forced the company to cut costs by improving its domestic supply chain, cutting jobs, and closing facilities. Its restructuring bill was $35 million in the quarter ended May 31.

Revenue at the U.S. retail segment, the company’s largest by sales, increased 5 percent to $2.5 billion, helped by higher sales of yogurt, snacks and frozen breakfast. Sales in international markets fell 8.8 percent to $1.22 billion.

While total revenue inched up 0.4 percent to $4.30 billion, it was less than the $4.53 billion analysts were expecting, according to Thomson Reuters I/B/E/S.

Net earnings attributable to General Mills fell 54 percent to $186.8 million, or 30 cents per share. Excluding items, its profit of 75 cents per share topped estimate of 71 cents.

Reporting by Ramkumar Iyer in Bengaluru; Editing by Savio D’Souza