General Mills

(GIS) - Get Report

said first-quarter earnings rose, in part thanks to productivity gains, and the company said it should meet its previous full-year 2004 profit estimates.

For the quarter ended Aug. 17, the company earned $227 million, or 59 cents a share, compared with $176 million, or 47 cents a share, last year.

Excluding restructuring and merger costs related to the October 2001 acquisition of Pilllsbury, first-quarter earnings would have been 62 cents, compared with 56 cents last year. Analysts were also calling for 62 cents a share.

Total sales rose 7% to $2.52 billion. Net sales for General Mills' domestic retail operations grew 7% to $1.72 billion. Combined retail sales for the company's major product lines rose 4% in the quarter, the company said.

Worldwide unit volume was up 3%, led by the company's U.S. retail businesses.

"Our first quarter gives us a good start heading into the fall and winter seasons, our largest earnings period of the year," said Chief Executive Steve Sanger. "We expect our U.S. retail businesses to lead our growth again in the second quarter, offsetting continued weakness in bakeries and foodservice."

The company sees net sales growth of 6% and earnings per share of $2.85 to $2.90 in 2004. The earnings target includes restructuring and other costs of about 10 cents to 15 cents a share, General Mills said.

Analysts currently expect the company to earn $3.01 a share in 2004.

Shares of General Mills rose 63 cents, or 1.3%, at $47.73.