General Mills Matches Forecast

General Mills'(GIS Quote) fourth-quarter earnings fell sharply from a gain-swollen year-ago period, but the cereal maker still matched Wall Street forecasts.

The company earned $222 million, or 61 cents a share, in the quarter, compared with $460 million, or $1.14 a share, a year ago. Last year's quarter had a gain of $284 million related to the sale of Lloyd's refrigerated meat and a European snacks venture. Analysts were forecasting earnings of 61 cents a share in the most recent period.

Sales rose 5%, to $2.85 billion, beating the consensus estimate of $2.80 billion, while unit volume rose 3%.

Retail net sales rose 5% about $1.9 billion, while domestic retail unit volume rose 3%. International sales rose 6% in 2006 to more than $1.8 billion, with unit volume up 4%. In bakeries and foodservice, revenue rose 2% to nearly $1.8 billion, while unit volume was flat.

For the fiscal year ending in May 2007, General Mills expects to earn $3.03 to $3.08 a share; analysts are calling for $3.07 a share.

"We expect another year of good operating performance, consistent with our long-term growth goals," General Mills said. "Our targets call for low single-digit growth in net sales and mid single-digit growth in segment operating profits. We anticipate this growth from our businesses will be partially offset by higher interest expense and a higher tax rate. In addition, beginning in the first quarter of 2007, our results will include stock option expense."

General Mills closed Wednesday at $51.46. In premarket trading Thursday, the shares rose 4 cents, or 0.1%, to $51.50.