General Mills Third-Quarter Profit Per Share Flat, Revenue Hurt by Coronavirus Outbreak

General Mills sales for the fiscal third quarter ended Feb. 23 trailed expectations amid depressed demand in Asia.
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General Mills GIS fell in trading Wednesday, as the coronavirus dented the Minneapolis cereal giant's revenue.

The trouble came in Asia, with sales falling 5% on that continent and in Latin America in the fiscal third quarter ended Feb. 23, compared with the year-earlier quarter, General Mills said.

“Our third-quarter results were broadly in line with our expectations, except for the negative impact in Asia of the Covid-19 virus outbreak,” General Mills Chief Executive Jeff Harmening said in a statement.

Overall, sales totaled $4.18 billion in the quarter, down from $4.2 billion in the year-earlier quarter and below the FactSet-derived analyst forecast of $4.21 billion.

To be sure, adjusted earnings per share totaled 77 cents, topping analysts’ expectations of 76 cents. 

General Mills reported fiscal-third-quarter GAAP net income of $454.1 million, or 74 cents a share, compared with $446.8 million, or 74 cents, a year earlier.

And General Mills lifted its adjusted-earnings-per-share forecast for all of fiscal 2020 to an increase of 6% to 8% from the prior estimate of an increase of 3% to 5%.

The company said it boosted its prediction because of stockpiling by North American and European consumers in reaction to the coronavirus. General Mills expects little disruption in its supply chain as a result of the virus.

But it does expect a reduction in visits to Haagen-Dazs ice cream shops and in food service. It anticipates organic-net-sales growth of 1% to 2% for the year.

At last check General Mills shares traded at $55.37, down 7.2%.