General Mills Profits Jump, Beat Estimates

Updated from 9:37 a.m. EDT

General Mills(GIS Quote), fueled by stronger sales and investment gains, reported a 61% jump in third-quarter earnings and backed its recently boosted profit forecast for the year.

For the quarter ended Feb. 24, the Minneapolis-based packaged-foods giant earned $430.1 million, or $1.23 a share, up from $267.5 million, or 74 cents a share, a year earlier.

The results were lifted by gains totaling 27 cents a share from the company's hedges on open commodity positions and grain inventories. Excluding these gains, earnings per share rose 18% to 87 cents.

Profits on this basis topped Thomson Financial's average analyst estimate of 79 cents.

General Mills' third-quarter sales rose to $3.41 billion from $3.05 billion the prior year, edging past Wall Street's $3.24 billion estimate.

In the U.S., sales rose 9% to $2.3 billion, lifted by strength in goods such as Yoplait yogurt, Progresso soups and Nature Valley snacks. International sales jumped 20% to $613 million, with foreign currency exchange accounting for 10 points of the increase.

"Our product innovation and consumer marketing investments are driving strong growth on the top line," said Chief Executive Ken Powell, "and cost-savings efforts, together with pricing actions, are offsetting significantly higher input costs and protecting our margins."

For the fiscal year ending in May, General Mills still expects earnings of $3.45 to $3.47 a share, excluding tax and commodity gains. Last month, the company lifted its forecast from a prior view of $3.39 to $3.43 a share.

Analysts, on average, predict full-year earnings of $3.47 a share.

Including the gains, General Mills expects a fiscal 2008 profit of $3.75 to $3.77 a share, up from a prior projection of $3.64 to $3.66. In fiscal 2007, the company earned $3.18 a share.

Know What You Own: General Mills operates in the consumer goods industry, and some of the other stocks in its field include Kellogg (K Quote), ConAgra Foods (CAG Quote), Kraft Foods (KFT Quote), Sara Lee (SLE Quote), Proctor & Gamble (PG Quote) and Tyson Foods (TSN Quote). These stocks were recently trading at ($51.57, +0.84%), ($22.20, +1.37%), ($30.78, +0.72%), ($13.03, -1.73%), ($68.62, +0.12%) and ($17.15, +3.56%) respectively. For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.