General Mills Backs FY17 Outlook As Q1 Adj. Profit Beats View - Quick Facts

(RTTNews) - Packaged-food company General Mills Inc. (GIS) on Wednesday reiterated its key fiscal 2017 targets. The company still expects constant-currency adjusted earnings per share growth of 6 percent to 8 percent from the base of $2.92 earned in fiscal 2016. At current exchange rates, the company estimates a 2 cent headwind from currency translation in 2017.

Organic net sales growth is still expected in a range from flat to down 2 percent and adjusted operating profit margin expected to increase approximately 150 basis points.

General Mills Chairman and Chief Executive Officer Ken Powell said, "We expect our organic net sales performance will improve over the remainder of the year as key Consumer First initiatives gain traction and as our prior-year comparisons ease."

For the first quarter of fiscal 2017, attributable net earnings totaled $409 million, down 4.1 percent from last year's $426.6 million. Earnings per share of $0.67 dropped 3 percent from $0.69 a year ago.

Adjusted earnings per share totaled $0.78 in the first quarter, down 1 percent from the prior year.

On average, 15 analysts polled by Thomson Reuters expected earnings of $0.75 per share. Analysts' estimates typically exclude special items.

Operating profit margin expanded 30 basis points to 16.5% of net sales, and adjusted operating profit margin increased 80 basis points to 19.2%.

Net sales declined 7% to $3.91 billion from $4.21 billion a year ago due to lower organic net sales, the divestiture of the North American Green Giant business, and the impact of foreign exchange. Analysts expected sales of $3.91 billion.

Organic net sales declined 4%. Increases in U.S. natural and organic brands and emerging markets were more than offset by declines in Foundation businesses and U.S. Yogurt.

Net sales performance did not meet expectations due to the challenging macro environment, a difficult year-over-year comparison, and a slower start to the year on certain businesses, the company said.

In pre-market activity, shares were gaining 1.24 percent to $65.50.