NEW YORK (Reuters) - General Mills Inc. (GIS) , maker of Cheerios cereal and Progresso soup, Thursday reported higher quarterly earnings as higher sales offset increased fuel, packaging and marketing costs.
Net income for the third quarter was $246 million, or 68 cents per share, compared with $230 million, or 58 cents per share, a year ago.
Wall Street analysts had expected the No. 2 maker of breakfast cereal to report earnings of between 63 cents and 69 cents per share with an average view of 65 cents per share, according to Reuters Estimates.
Total sales rose 3 percent to $2.86 billion.
Like others in the packaged food industry, the No. 2 maker of breakfast cereal has been hit by soaring prices on commodities like sugar, soybeans and energy. To help alleviate the impact of some of those increases,
Since then, Big G volumes have improved, in part because General Mills increased marketing activity.
For fiscal 2006, General Mills said it still expects to earn between $2.80 per share and $2.85 per share, including about 8 cents of dilution associated with accounting for contingently convertible debt. Excluding that item, the Minneapolis company expects to earn $2.88 per share to $2.93 per share.
Analysts, on average, are expecting earnings of $2.93 per share, according to Reuters Estimates.
CHICAGO (Reuters) - ConAgra Foods Inc. (CAG) Thursday posted a quarterly loss, hurt by higher costs and charges related to restructuring and litigation.
ConAgra, the maker of Healthy Choice frozen meals and Hebrew National hot dogs, posted a net loss of $31.7 million, or 6 cents a share, for the third quarter, ended Feb. 26. That compared with a profit of $165.3 million, or 32 cents a share, a year earlier.
Excluding one-time items, earnings were 37 cents a share. Analysts, on average, expected 34 cents a share, according to Reuters Estimates.
ConAgra, under new Chief Executive Gary Rodkin, is trying to jump start sales by spending more to market its brands. Last week, the company cut its dividend to fund that spending, and said earnings in fiscal 2007 would be $1.10 to $1.15 per share, below analysts estimates.
The company has also said it will divest its seafood, lunch meat and imported cheese business.
"Although the underlying operating performance in the third quarter met our overall expectations, our fundamentals still need to be much stronger," Rodkin said in a statement.
ConAgra, whose other brands include Chef Boyardee and Hunt's, said total sales rose 4.4 percent to $2.88 billion.
The company will boost annual marketing spending by $75 million and focus more of its marketing on top brands like Egg Beaters egg substitutes, Pam cooking spray and Orville Redenbacher's popcorn, it told analysts at a meeting a week ago.