By Andria Cheng
NEW YORK (Dow Jones) -- While demand for its Big G cereals and
Totino's pizza increased as consumers ate more at home, General
Mills Inc.'s third-quarter profit fell 33%, hurt by higher product
costs and marketing expenses.
Net income fell to $288.9 million, or 85 cents a share, from
$430.1 million, or $1.23, a year earlier, when the company had
"unusually strong" grain merchandising profits for helping others
handling or storing grains in its grain elevators. Sales in the
quarter ended Feb. 22 rose 3.9% to $3.54 billion. Foreign currency
translation reduced sales gains by 3 percentage points.
Excluding one-time items such as an insurance settlement gain,
per-share profit would have declined to 79 cents a share from 87
cents a year earlier, General Mills said.
Analysts polled by FactSet had expected a profit of 87 cents a
share. Analyst estimates usually exclude one-time items.
General Mills shares fell 2.7% in pre-market trading.
The company (GIS) increased its full-year estimate of profit,
excluding non-recurring items, to $3.87 to $3.89 a share, from a
previous projection of $3.83 to $3.87.
It expects fourth-quarter product cost inflation to be "well
below" its estimated full-year inflation rate of 9%. Results also
would be aided by an extra selling week this year.
Net sales for the U.S. Retail operations rose 8% to $2.5
billion, helped by gains in Big G cereals and baking products such
as Betty Crocker dessert mixes. Overseas sales fell 5% to $580
million, but would have gained 10% on a constant-currency
basis.
Like other food companies, General Mills has benefited from
consumers cooking and eating more at home in the face of rising job
losses and other economic concerns, analysts have said.
Sales for the bakeries and foodservice segment declined 6% to
$462 million.