General Mills Inc, maker of Cheerios cereal and Betty Crocker baking products, reported a quarterly profit that fell short of market estimates largely due to higher commodity costs.
The company, whose shares fell 3 per cent in premarket trading, said it would launch new products, revamp existing ones to revive sales and continue to cut costs.
General Mills said it has begun a review of its North American manufacturing and distribution network to streamline operations with the aim to save $40-million pretax for the year ending May 2015.
Sales in the company’s U.S. branded goods retail business, the largest contributor to revenue, fell 1 per cent to $2.4-billion.
The division, whose brands include Green Giant meals, Progresso soup and Pillsbury frozen foods, has been hurt by increased competition from cheaper store-branded foods in recent quarters.
The owner of Yoplait yogurt said net sales fell 2.8 per cent to $4.41-billion. Analysts had expected sales of $4.42-billion.
The company said it expected 2015 net sales to grow at mid single-digits and adjusted earnings per share to grow at high single digits.
Net income rose 10.4 per cent to $404.6-million, or 65 cents per share, in the fourth quarter, from $366.3-million, or 55 cents per share, a year earlier.
Excluding items, earnings were 67 cents per share, way below the average analyst estimate of 72 cents, according to Thomson Reuters I/B/E/S.
One-time items include a 6 cent per share gain on the sale of several grain elevators and a 9 cent per share charge associated with the Venezuelan currency devaluation, the company said.
The Minneapolis, Minnesota-based company’s shares closed at $53.70 on Tuesday.
Follow us on Twitter: