General Mills reports high earnings for fourth quarter

By Karren Mills

Associated Press

MINNEAPOLIS -- General Mills Inc. on Wednesday reported fourth-quarter earnings of $225 million, nearly four times the $57 million earned a year earlier when it had high costs related to its acquisition of Pillsbury.

Earnings were 59 cents a share for the three months ended May 25 compared with 15 cents a share a year earlier. Excluding one-time items mostly related to the deal for Pillsbury, earnings would have been 64 cents a share, up from 25 cents a share a year earlier.

The latest results beat by a penny a share the consensus estimate of analysts surveyed by Thomson First Call.


Sales for the Golden Valley-based food manufacturer totaled $2.55 billion in the fourth quarter, up from $2.32 billion a year earlier.

For the full year, General Mills earned $917 million, or $2.43 per share, up from $458 million, or $1.34 per share a year earlier.

Sales totaled $10.51 billion, up from $7.95 billion in fiscal 2002.

The company's U.S. retail operations led the sales increase, growing 25 percent to more than $7.4 billion. Spurring the growth were strong sales of the company's new Berry Burst Cheerios, Big G Milk 'n Cereal bars, Yoplait yogurt, Progresso soup, Betty Crocker dinner mixes, Pillsbury Home Baked Classics frozen baked goods and Totino's frozen pizza and snacks.

"In our first fiscal year after the Pillsbury acquisition, we achieved strong sales growth, significant cost synergies and earnings-per-share that beat the target we set last June by a nickel," said Steve Sanger, chairman and chief executive. "That performance enabled us to deliver a positive return to our shareholders in a down market."

Looking ahead, Sanger said General Mills plans to grow sales by 5 percent to 6 percent over the next three years, with at least 11 percent compound growth in earnings per share. Fiscal 2005 is expected to be the slowest growth year, the company said.

For fiscal 2004, Sanger said General Mills anticipates per-share earnings ranging from $2.85 to $2.90, an increase of 17 percent to 19 percent, including restructuring, other exit and merger-related costs of 10 cents to 15 cents per share. Excluding those one-time items, the range would be $2.95 to $3.05 per share. The Thomson First Call consensus estimate was $3.01 per share.

"We expect our absolute earnings per share to be split fairly evenly between the first half of the year and the second, just as it was in fiscal 2003," said James Lawrence, chief financial officer. Results in the first quarter will be stronger due to lower costs related to the merger, while fourth-quarter results will get a boost from an extra week compared with the previous year, he told analysts gathered at the company's headquarters.


Sanger said the company plans to introduce 81 new products in the first half of fiscal 2004, plus several other new products planned for introduction in dollar stores, natural food stores and club stores.

Sanger also noted that the fiscal year contains a 53rd week and said General Mills expects to achieve an additional $125 million in savings related to the Pillsbury acquisition as well as increased productivity.

"With the hard work of integrating General Mills and Pillsbury now behind us, our new company is positioned to deliver superior growth and shareholder returns going forward," Sanger said.

General Mills shares rose 17 cents to close at $47.80 on the New York Stock Exchange.

What To Read Next
Caitlin and Jason Keck’s two-year term on the American Farm Bureau Federation committee begins next month.
The Minnesota Public Utilities Commission met on Jan. 5, 2023, to consider the application for Summit Carbon Solutions.
Qualified Minnesota farmers will receive dollar-for-dollar matching money to purchase farmland.
Wanda Patsche, new Farm Camp director, has farmed with her husband near I-90 in southern Minnesota since the 1970s and shares her passion for farming on her blog.