General Mills Inc. reported lower-than-expected quarterly earnings on Tuesday, as higher ingredient costs hurt gross margins.
The maker of Progresso soups and Cheerios cereal reported net income of $444.8-million, or 67 cents per share, for the second quarter ended on Nov. 27, down from $613.9-million, or 92 cents per share, a year earlier.
Excluding the effects of accounting for commodity hedges, costs from the acquisition of Yoplait and a tax benefit, earnings were 76 cents per share.
On that basis, analysts on average were expecting 79 cents per share, according to Thomson Reuters I/B/E/S.
Sales rose 14 per cent to $4.62-billion, helped by the addition of Yoplait, increases in price and volume, and foreign exchange rates.
The company affirmed its forecast for fiscal 2012, saying it still expects earnings of $2.59 to $2.61 per share, excluding items.
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