General Mills Inc. reported higher-than-expected quarterly earnings on Wednesday but lifted its full-year forecast only slightly, citing higher costs.
The maker of Cheerios cereal and Progresso soups said it expected earnings in the current fourth quarter to be lower than a year earlier, hurt by increased spending for in-store merchandising.
The company also expects a 3-per-cent rise in costs for fuel and ingredients such as grain.
For fiscal 2013, which will end in May, General Mills forecast earnings of $2.66 (U.S.) to $2.68 a share, a penny higher than its prior range of $2.65 to $2.67.
In the third quarter ended on Feb. 24, net income was $398.4-million, or 60 cents per share, up from $391.5-million, or 58 cents per share, a year earlier.
Excluding one-time items, earnings were 64 cents per share. On that basis, analysts on average were expecting 57 cents, according to Thomson Reuters I/B/E/S.
Net sales rose 7.5 per cent to $4.43-billion.
For fiscal 2014, the company expects high single-digit earnings growth, which it said was in line with its long-term model.