The food products company reported on March 21 third-quarter earnings of $391.5 million, or 61 cents a share, compared with year-earlier earnings of $392.1 million, or 61 cents."The U.S. consumer continues to be weak, but GIS expects a stabilization as the company laps price increases," Jefferies analysts wrote in a March 22 report. "Volume in the U.S. retail business declined 5%, more than offset by 9% of price increases, mostly in line with our assumptions prior to the pre-announcement. Organic revenue growth of 4% was actually the best quarterly result of FY12 so far for GIS. However, the EBIT margin declined 160bps, comparable to the decline in 1H12. Apparently pricing has still not caught up with commodity costs, which is likely to result in further gross margin decline in 4Q12. In addition, the volume losses impacted the fixed cost absorption." Forward Annual Dividend Yield: 3.1% Rated "A- (Buy)" by TheStreet Ratings: The company's third-quarter gross profit margin decreased from the previous year. General Mills has very weak liquidity. Its Quick Ratio is 0.50, which demonstrates a lack of ability to meet its short-term cash needs. In the third quarter, stockholders' net worth increased 17.99% from the prior year. TheStreet Ratings' price target is $46.67.
Darden The restaurant company reported on March 23 third-quarter earnings of $164.1 million, or $1.28 a share, up from year-earlier earnings of $151.2 million, or $1.11. "Despite heavy advertising and the price point, 2-year comps trends only improved 110bps from Jan to Feb (promotion launched in the last week of Jan) and two-year traffic trends actually slowed by 100bps," Credit Suisse analysts wrote in a March 23 report. "The improvement came from an additional 80bps of price and a much less negative mix shift, with a mix-shift from lunch to dinner likely driving much of the mix benefit." Forward Annual Dividend Yield: 3.4% Rated "A+ (Buy)" by TheStreet Ratings: The company's third-quarter gross profit margin was basically the same as it was a year ago. Darden Restaurants has very weak liquidity. Its Quick Ratio is 0.08, which demonstrates a lack of ability to meet its short-term cash needs. In the third quarter, stockholders' net worth decreased 7.65% from the prior year. TheStreet Ratings' price target is $58.56.
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