MINNEAPOLIS (

TheStreet

) --

General Mills

(GIS) - Get Report

, the maker of Cheerios cereal, said fiscal second-quarter net earnings rose almost 9% as net sales increased 1% to $4.07 billion.

General Mills earned $614 million, or 92 cents a share, in the second quarter compared with year-earlier earnings of $565.5 million, or 83 cents a share.

The latest quarter included a tax benefit. Excluding this and the effects of mark-to-market valuation of certain commodity positions this year and last, adjusted earnings were 76 cents a share vs. 77 cents.

Analysts polled by Thomson Reuters expected the company to earn 78 cents a share on sales of $4.1 billion.

The company said reduced price realization and mix subtracted 2 points of sales growth in the quarter.

General Mills said gross margin in the second quarter fell from strong year-earlier levels on higher commodity costs.

The company reaffirmed fiscal 2011 full-year earnings guidance of $2.46 to $2.48 a share, excluding the second-quarter tax benefit. General Mills said the EPS guidance represents growth of 7% to 8% from 2010 adjusted earnings of $2.30 a share.

-- Written by Joseph Woelfel

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