General Mills reported higher-than-expected quarterly earnings, helped by recent acquisitions and improving trends in the U.S. market. Net income for the quarter rose to $548.9 million, or $0.82 per share, in the first quarter from $405.6 million, or $0.61 per share, a year earlier. Excluding a tax benefit and a gain from the higher valuation of certain commodity positions, earnings were $0.66 per share.
On that basis, analysts on average were expecting $0.62, according to Thomson Reuters. Sales fell a little short of estimates, rising 5% to $4.05 billion, while analysts were expecting $4.08 billion. GIS saw some benefits in the quarter from its acquisitions of Food Should Taste Good, Yoplait Ireland, Parampara Foods and Yoplait International.
GIS, whose shares are up nicely, said it expected further benefits in fiscal 2013, starting in the current second quarter, from its purchases of Yoplait Canada and Yoki Alimentos in Brazil. Chief Executive Officer Ken Powell said gross margins and volume trends had improved from the previous quarter. "In our core U.S. market, we are seeing slow improvement in price and volume trends across our retail food categories," Powell said in a statement.
Volume increases contributed 9% points of growth, but the value of the sales was reduced by the stronger U.S. dollar. GIS also sold more lower-priced items. The company affirmed its full-year outlook, which calls for 2013 earnings of about $2.65 per share.
General Mills (GIS : NYSE : US$40.02), Net Change: 0.71, % Change: 1.81%, Volume: 10,425,639