General Mills Reports 38% Rise in Q1 Profits

23/09/05 General Mills has reported a 38 per cent rise in first-quarter profits as a cereal revival gets underway. Net sales for the 13 weeks ended Aug. 28, 2005, increased 3 percent to $2.66 billion over the same period a year ago, as unit volume grew 1 percent worldwide.  Segment operating profits increased 21 percent to $500 million.  Earnings after tax totaled $252 million, up 38 percent from $183 million last year.  Diluted earnings per share (EPS) increased to 64 cents this year from 45 cents in last year’s first quarter. 

Net sales for General Mills’ domestic retail operations grew 2 percent to $1.80 billion for the quarter, reflecting net price realization and favorable mix of sales.  Volume matched strong year-ago levels, that were up 4 percent.  Operating profits increased 15 percent to $406 million, reflecting favorable production mix and productivity. 

Yoplait led net sales growth, with a 19 percent increase driven by Yoplait Light, and new items including Chocolate Whips and Yoplait and Go-Gurt Smoothies.  Meals division net sales grew 4 percent, led by Progresso soup and Green Giant frozen vegetables.  Snacks net sales grew 3 percent, with good performance by the Nature Valley and Chex Mix businesses. 

Pillsbury USA net sales finished down 1 percent compared with 9 percent growth in the first quarter of last year.  Baking Products net sales matched last year’s first-quarter results, which were up double-digits from fiscal 2004.  Big G cereal sales also matched prior-year results, as a 6 percent volume decline was offset by good price realization.  The first-quarter launch of seven new cereal items, including three new varieties of Total cereal and two flavors of Yogurt Burst Cheerios, is expected to contribute to renewed sales growth for Big G in the remainder of the year, the company reported.