Wednesday, September 17, 2008

Earnings: General Mills Beats by 9 Cents, Raises Guidance (GIS)

UPDATE: My abacus broke, the YoY earnings decline was 3.6%. Long week, sorry. The stock is at $69.97 up $1.42 with the DJIA down 253.
Original Post:
Year over year EPS were down 2.5%, which is a sign of good management. This report is for the 13 weeks ended Aug. 24 as they were unwinding their hedges. For the current quarter they are going to get the benefit of falling commodity prices, which is why we posted "Corn slumps to five-month low as dollar rallies. And: General Mills will kill with lower costs" on August 9 with the stock at $66.93 and "Corn falls to one-month low - -A Reverse Commodity Play: General Mills (GIS)" on September 9, at $67.68. The stock close yesterday at $68.55. They raised guidance for the FY May 31, '09 by a couple cents.
From MarketWatch:
General Mills oday reported results for the first quarter of fiscal 2009. Net sales for the 13-weeks ended August 24, 2008, grew 14 percent to $3.5 billion. Volume increases (measured in pounds) contributed 4 points of sales growth. Segment operating profits grew 9 percent to $632 million despite higher input costs and a 17 percent increase in consumer marketing investment. First-quarter net earnings totaled $279 million after a net reduction related to mark-to-market valuation of certain commodity positions (this non-cash item is discussed below in the section titled Corporate Items). Diluted earnings per share (EPS) totaled 79 cents, including a 17-cent net reduction related to mark-to-market valuation. Excluding the mark-to-market impact, earnings per share would have totaled 96 cents, up 19 percent from 81 cents per share earned in last year's first quarter.

Chairman and Chief Executive Officer Ken Powell said, "We're off to a great start in 2009, powered by strong consumer demand for our products in markets around the world. Our U.S. Retail sales grew 13 percent, International sales rose 15 percent, and Bakeries and Foodservice sales were up 17 percent for the quarter. Operating profits showed strong growth despite the input cost pressure and our increased consumer marketing investment....MORE
Sometimes boring is good. The stock is trading at $69.00 pre-market, up half a percent. Throw in a 2 1/2% dividend and you beat CalPERS for the quarter:

Pension Funds Drive Growth Of Alternative Assets. And: CalPERS Up 68% on Commodities; Down 31% on Real Estate. Action, Baby, Action!