General Mills Net Inches Up

NEW YORK - Dec 19/07 - SNS -- General Mills reported net earnings of U,.S. $390.5 million on sales of $3,703.4 million for the second quarter ending November 30, compared to a net of $385.4 million on sales of $3,446.6 million during the same three month period last year.

This lifted earnings for the first half of the current fiscal year to $679.4 million on sales of $6,774.5 million, compared to net earnings of $652.3 million on sales of $6,327 million last year.

Second-quarter net sales for General Mills' U.S. Retail operations grew 3% to $2.52 billion. Unit volume fell 2% and operating profits declined 2% to $584 million. Product recall expenses reduced U.S. Retail operating profit by $20 million in the quarter.

Snacks division net sales grew 12%, fueled by continued strong sales and market share gains for Nature Valley grain snacks, Fiber One bars and fruit snacks. Yoplait division net sales increased 11%, reflecting pricing, continued strong performance from Yoplait Light yogurt, and good initial results from new products including Yo-Plus yogurt with probiotic cultures and fiber.

Net sales for Big G cereals grew 3%, following 5% growth in the first quarter of 2008. Baking Products net sales also increased 3%. Meals division net sales grew 1%, led by Progresso ready-to-serve soups. Pillsbury USA division sales declined 2% including the impact of the frozen pizza recall. Net sales for the company's Small Planet Foods organic business rose 14%.

Second-quarter net sales for General Mills' consolidated international businesses grew 22% to $666 million. Volume increases contributed 8 points of growth, pricing and mix added 5 points of growth, and foreign exchange accounted for 9 points of the increase. Sales grew in every major geographic region in which the company competes. Latin America led net sales growth in the quarter, driven by market share gains and pricing actions taken in key countries. Asia/Pacific and Europe grew net sales at double-digit rates. Net sales in Canada increased 2%. International segment operating profits grew 36% to $84 million.

Through the first half, International segment net sales grew 20% to $1.27 billion and operating profits increased 32% to $155 million.

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