This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

General Mills Can Still Satisfy (Earnings Preview)

This means that even amid periods of sluggishness, management has never lost focus of the core business. With the likes of Kellogg (K) and Post Holdings (POST) expanding into new product categories, it's impressive that General Mills still found ways to grow margins and make efficiency improvements.

What's more, management expected to grow operating margin in each of the company's three business segments, which includes U.S. Retail, Bakeries and Foodservice International.

Of the three segments, the question mark continues to be with U.S. retail operations. Sales declined in 1% December to $2.97 billion, making up the majority of reported revenue. But revenue have been under pressure due to low volumes.

It is encouraging that international sales remain a steady source of growth, about 2% revenue growth to $1.40 billion. Revenue were driven by solid pricing and volume growth. Here again, the slightly better results last quarter were offset by an impact of 3% in currency adjustments.

So for this and other reasons, management remains optimistic the company can achieve its long-term growth plan. Along with mid-single-digit growth in segment operating profit, management expects strong improvement in adjusted gross margin for fiscal 2014.

Meanwhile, the company said it expects to post double-digit growth in adjusted per-share earnings for the fiscal fourth quarter. The company added the expected rate of input cost growth, the quarterly tax rate and the average number of the company's shares outstanding will be "well below" levels in the same period in the previous year.

With shares trading around $50, I don't see anything that should prevent General Mills from reaching $60 per share some time in the second half of the year. Given the strong growth momentum the company enjoys in international markets, this should benefit the company's cash flow and its ability to increase the dividends and continue its share buyback plan.

At the time of publication, the author held no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GIS $53.79 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%
TSLA $203.34 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs