General Mills Beats by a Penny, Raises Sales Outlook

General Mills (GIS) reported a 1.3% increase in fiscal 2Q-2008 net income to $390.5 million, or $1.14/share, beating estimates by a penny. Sales rose nearly 7% to $3.7B, compared to analysts' forecast of $3.62B. General Mills raised its sales outlook for the remainder of the fiscal year, saying it now expects mid-single digit growth, above its low-single digit long-term goal. Analysts had been expecting full-year sales growth of 4.6%, on average. The company reaffirmed its full-year EPS outlook of $3.39 to $3.43, which is short of analyst estimates of $3.45.

In a statement, CEO Ken Powell commented on General Mills' "good growth" and tracking of full-year targets, in spite of "significant input cost inflation, recall expenses and double-digit growth in consumer marketing investment," (earnings call transcript later today). General Mills recorded 22% overseas sales growth to $666M. Sales grew 2% to $2.52B domestically, led by snacks (+12%) and yogurt (+11%). Shares of General Mills rose 0.7% to $59.07 on Tuesday. General Mills is a top-5, 4.8% component of PowerShares Dynamic Food & Beverage ETF (PBJ).

Sources: Press release, Bloomberg, MarketWatch

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