Shares of General Mills (GIS - Get Report) dropped more than 6% on Wednesday, even as the company served up strong fiscal fourth-quarter earnings primarily driven by its acquisition of pet-food maker Blue Buffalo.
The Minneapolis-based food maker posted net earnings of $570 million, or 83 cents an adjusted share, vs. $354 million, or 79 cents an adjusted share, in the comparable year-earlier period. Analysts polled by FactSet had been expecting earnings of 77 cents.
However, while sales increased 7% to $4.2 billion, the number fell slightly short of analysts' forecasts, sending investors to the exits.
Net North American sales, which account for more than half of the company's revenue, fell 2% due to a decline in its U.S. snacks business.
For the full year, General Mills earned $1.75 billion, or $3.22 an adjusted share, vs. $2.13 billion, or $3.11 an adjusted share, a year earlier.
For fiscal 2020, the company expects organic net sales to increase 1-2%, and adjusted full-year earnings per share 3-5% higher than the $3.22 it earned in fiscal 2019.
"We'll look to improve our performance again in fiscal 2020, and we have plans in place to accelerate our organic sales growth while maintaining our strong margins and cash discipline," CEO Jeff Harmening said in a statement.
The food manufacturer, which also produces international brands like Cheerios, Pillsbury, and Haagen-Dazs ice cream, suffered a setback this past January after it issued a voluntarily recall of certain bags of its Gold Medal branded unbleached flour over salmonella concerns.