General Mills profit beats as cost cutting pays off
(Reuters) - General Mills Inc GIS.N, the maker of Cheerios cereal and Yoplait yogurt, reported a better-than-expected quarterly profit as cost-cutting programs helped reduce the impact of weaker sales in the United States.
Processed food makers such as General Mills, Kellogg Co K.N and ConAgra Foods Inc CAG.N have been struggling as U.S. consumers switch to foods they consider to be healthier.
General Mills said lower volume sales reduced sales growth by 8 percentage points in its U.S. business in the quarter ended Feb. 28. The company gets about 60 percent of its sales from the United States.
Minneapolis-based General Mills has responded to weak U.S. sales by cutting jobs and selling plants and exiting less-profitable brands, while investing in gluten-free foods and cutting back on salt and artificial ingredients in its products.
Net income attributable to General Mills rose to $361.7 million, or 59 cents per share, in the third quarter, from $343.2 million, or 56 cents per share, a year earlier.
Excluding items, the company earned 65 cents per share.
The company's net sales fell 8 percent to $4 billion, falling for the third quarter in a row.
Analysts on average had expected earnings of 62 cents per share on revenue of $4.08 billion, according to Thomson Reuters I/B/E/S.
General Mills also said it expects to incur a pretax non-cash charge of about $35 million in the fourth quarter related to the sale of its Venezuela unit. Continued...