General Mills reports quarterly profit above estimates, shares rise

[December 19, 2018]  (Reuters) - General Mills Inc <GIS.N> reported quarterly profit above Wall Street estimates, as the Cheerios cereal maker managed to eke out higher margins from cost saving initiatives, sending its shares up nearly 5 percent before the bell on Wednesday.

 General Mills cereals rest on a shelf inside of a grocery store in New York, U.S., March 20, 2017. REUTERS/Lucas Jackson

Adjusted gross margin, which came in at 34.5 percent for the second quarter ended Nov. 25, beat the average estimate of 33.76 percent, according to IBES data from Refinitiv.

Excluding items, the company earned 85 cents per share, 4 cents above analysts' average estimate.

"Our job to do in the second half is to accelerate our sales growth while maintaining that same (cost and capital)discipline," Chief Executive Officer Jeff Harmening said in a statement on Wednesday.

Net sales rose 5 percent to $4.41 billion, helped by its acquisition of pet products maker Blue Buffalo, but was slightly below the average estimate of $4.51 billion.

Net earnings attributable to the company fell to $343.4 million, or 57 cents per share, from $430.5 million, or 74 cents per share, a year earlier, due to lower operating profit and higher interest expense.

(Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli)

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