(By Balachander) General Mills Inc. (NYSE:GIS) reported higher quarterly profit as double-digit growth in sales offset drop in gross margins, but the maker of branded consumer foods guided fiscal 2013 below market expectations.
On an adjusted basis, the Minneapolis, Minnesota-based company earned 60 cents a share, compared with 52 cents in the same period of last year. Net earnings rose 1.6 percent to $325.4 million.
The company, whose markets brands include Betty Crocker, Pillsbury, Fiber One and Cheerios, said net sales increased 12 percent to $4.06 billion.
Analysts, on average, polled by Thomson Reuters expected earnings of 59 cents per share on sales of $4.11 billion for the fourth quarter.
Gross margin on an adjusted basis contracted 140 basis points to 37.2 percent hit by a rise in input costs and the change in business mix to include the
the acquisition of Brazilian food maker Yoki Alimentos.
Looking ahead for fiscal 2013, General Mills forecasts adjusted earnings per share of about $2.65 on net sales growth at a mid-single-digit rate. Analysts expect earnings of $2.75 per share on sales of $17.48 billion.
For the third quarter ended February 26, the company's adjusted earnings fell to 55 cents from 56 cents. Net earnings were nearly flat at $391 million. Net sales rose 13 percent to $4.12 billion.
GIS shares, which have been trading in the 52-week range between $34.64 and $41.06, ended Tuesday's regular trading at $38.15.