Earnings Preview: General Mills, Inc

|
 |  About: General Mills, Inc. (GIS), Includes: CAG, K, MDLZ, UL
by: StockPandit

Company Profile

General Mills, Inc. manufactures and markets branded consumer foods worldwide. It also supplies branded and unbranded food products to the foodservice and commercial baking industries.

General Mills (NYSE:GIS) is scheduled to report its fourth quarter earnings results on June 27, 2012, before market open.

Technical Overview

click to enlarge all imagesClick to enlarge

General Mills has a market cap of $24.88 billion and it is currently trading around $38.31 with a 52 week range of $34.64 to $41.06. The stock has fallen 5.30% year to date. The following table provides the key financial ratios for General Mills:

Key Ratio Value
Current Ratio 1
PEG 2.13
P/E 16.43
Forward P/E 13.98
Profit Margin 9.08%
Return On Assets (ROA) 7.42%
Return On Equity (ROE) 24.43%
Click to enlarge

Recent News

  • On May. 24, 2012, General Mills announced that it has signed a definitive agreement to acquire Yoki Alimentos S.A., a privately-held food company headquartered in Sao Bernardo do Campo, Brazil. General Mills currently expects the transaction to close during the first half of its 2013 fiscal year, which begins on May 28, 2012, after satisfaction of customary closing conditions.
  • On May. 22, 2012, General Mills announced a productivity and cost savings plan designed to improve organizational effectiveness and focus on key growth strategies. The plan includes organizational changes that strengthen business alignment, and actions to accelerate administrative efficiencies across the company. In connection with this initiative, the company expects to eliminate approximately 850 positions globally.
  • On May. 15, 2012, In conjunction with remarks at the Barclays Americas Select Conference in London, England, General Mills reaffirmed its sales and earnings targets for the current fiscal year ending May 27, 2012. The company reiterated fiscal 2012 earnings per share guidance of $2.53 to $2.55 excluding mark-to-market effects and integration costs related to the acquisition of a controlling interest in Yoplait S.A.S.
  • On May. 10, 2012, General Mills confirmed today that Yoplait S.A.S. has reached an agreement to terminate the current Yoplait brand license in Canada on September 1, 2012.

Here's a list of recent changes to analyst ratings:

  • On June 11, 2012 Thomas White/Global Capital downgraded General Mills from FAVORABLE to NEUTRAL.
  • On June 4, 2012 Thomson Reuters/Verus downgraded General Mills from BUY to HOLD.
  • On April 2, 2012 Thomson Reuters/Verus upgraded General Mills from HOLD to BUY.
  • On March 12, 2012, Goldman Sachs downgraded General Mills from CONVICTION BUY to NEUTRAL and lowered the price target from $43 to $42.

Analyst Guidance and Earnings History

The fourth quarter revenues are expected to be $4.11 billion when compared to $3.63 billion for the same quarter last year. Earnings per share for the fourth quarter are expected to be 59 cents a share, up from a 52 cents a share in the year-ago period.

The average price target from analyst for General Mills is $42.29 with average rating is OVERWEIGHT

Out of the last 4 quarters, General Mills has met or exceeded the EPS estimates 2 times. The following chart shows the Analyst estimates history and the actual EPS results:Click to enlarge

The following chart shows the annual summary of Sales and Net income for General Mills:

Click to enlarge

Competition

Kellogg Company (NYSE:K), Unilever plc (NYSE:UL), Kraft Foods (KFT), and ConAgra Foods (NYSE:CAG) are considered as major competitors for General Mills and the table below provides the key metrics for these companies:

Click to enlarge

Sources: Some of the data is taken from Google Finance, Yahoo Finance, Nasdaq, Finviz and investor sites.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in GIS over the next 72 hours. (I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.)