General Mills profit edges higher as revenue growth offsets higher costs

Cereal and packaged foods maker General Mills Inc. said Wednesday its second-quarter profit edged up as revenue growth offset rising ingredient costs, marketing spending and recall expenses.

The company that makes Cheerios cereal and Yoplait yogurt earned $390.5 million, or $1.14 per share, for the period ended Nov. 25 versus $385.4 million, or $1.08 per share, in the year-ago period.

General Mills said the latest quarter included $13 million in restructuring and related costs and said expenses related to the recall of frozen pepperoni pizza lowered results by 4 cents per share.

Revenue rose 7 percent to $3.7 billion from $3.47 billion a year earlier.

Analysts polled by Thomson Financial expected net income of $1.13 per share on sales of $3.62 billion. The earnings estimates typically exclude one-time items.

U.S. retail revenue grew to $2.52 billion from $2.44 billion with solid results from the Yoplait division and Nature Valley snacks, while international sales increased to $665.7 million from $544.6 million on strength in Latin America. Bakeries and foodservice revenue climbed to $516.7 million from $480.3 million due to price increases implemented to offset rising input costs.

The company maintained its 2008 profit outlook between $3.39 and $3.43 per share.

Analysts predict earnings of $3.45 per share on revenue of $13.01 billion.