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General Mills Shares Plunge 5% On Earnings Miss, Lower Forecast
From StockNews.com: General Mills, Inc. (NYSE:GIS) early Tuesday posted worse than expected second quarter earnings and cut its full-year outlook, sending its shares lower in morning trading.
The Minneapolis-based company reported Q2 EPS of $0.85, which missed Wall Street’s consensus estimate of $0.86 by a penny. Net sales fell 7% from last year to $4.1 billion, also falling short of analyst projections.
Operating profit margin was 18.7% in the latest period, down 180 basis points versus a year ago, but adjusted operating profit margin rose 160 basis points to 19.6%.
Looking ahead, GIS cut its full-year 2017 organic sales guidance to a range of -3% to -4%, down from a prior outlook of flat to -2%. The maker of Cheerios cereal and Häagen-Dazs ice cream still expects adjusted operating profit margin expansion of about 150 basis points, and adjusted EPS growth of 6-8% from the $2.92 level it earned in fiscal 2016.
The company commented via press release:
“Although we posted disappointing net sales performance in the second quarter, we delivered good growth in adjusted diluted EPS, driven by significant expansion in our adjusted operating profit margin,” said General Mills Chairman and Chief Executive Officer Ken Powell. “Our organic sales declines reflect the actions we’ve taken to optimize our spending and prioritize profitable volume, as well as weakening food-industry trends in the U.S. We’re making targeted adjustments to our plans in the second half to improve our topline performance while still delivering our margin expansion and EPS growth commitments. We remain confident that our strategy of investing behind Consumer First ideas – while driving strong margin expansion – will generate long-term sustainable growth, robust cash flow, and top-tier returns for our shareholders.”
General Mills shares fell $3.06 (-4.85%) to $60.00 in premarket trading Tuesday. Prior to today’s report, GIS had gained 9.37% year-to-date, putting it roughly in-line with the benchmark S&P 500’s performance during the same period.
GIS currently has a StockNews.com POWR Rating of B (Buy), and is ranked #22 of 61 in the Food Makers category.
This article is brought to you courtesy of StockNews.com.
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