General Mills profit dips as commodity costs rise

MINNEAPOLIS, Wed Mar 21, 2012 – General Mills Inc. posted a quarterly profit in line with Wall Street expectations and stood by its lowered full-year forecast as it faces higher costs for raw materials.

“Fiscal 2012 has represented a challenging operating environment, with the highest level of commodity inflation that we’ve seen in 30 years,” CEO Ken Powell said in a statement on Wednesday.

Shares of General Mills were down 0.7 percent at $38.50 in trading before the market opened.

Powell said sales momentum in the current fourth quarter would somewhat ease the gross margin declines that hurt results in the third quarter, which ended on Feb. 26.

The maker of Progresso soups, Cheerios cereal and Green Giant frozen vegetables said third-quarter net income had fallen to $391.5 million, or 58 cents per share, from $392.1 million, or 59 cents per share, a year earlier.

Excluding one-time items, earnings were 55 cents per share.

Analysts on average had been expecting 55 cents per share, according to Thomson Reuters I/B/E/S, after General Mills forecast a range of 54 cents to 56 cents in February.

At the time, the company cut its full-year outlook to a range of $2.53 to $2.55 per share from a prior forecast of $2.59 to $2.61, citing weak sales.

On Wednesday, the company stood by that full-year forecast.

Third-quarter net sales jumped 13 percent to $4.12 billion, helped by price increases and last year’s acquisition of a controlling stake in the Yoplait yogurt brand. Excluding the acquisition, sales volume would have fallen, as some consumers were turned off by the price increases.

Honeywell sees defense, space sales down 4 to 5 percent

MORRISTOWN, N.J. – Diversified manufacturer Honeywell International Inc. said it expects sales at its defense and space business to fall by 4 percent to 5 percent this year as the United States pares back its military spending.

The world’s largest maker of cockpit electronics said on Tuesday the forecast decline follows a 2 percent drop in 2011. It looks for defense revenue to stabilize in 2013 and resume slow growth the year after.

This forecast was included in its previously disclosed full-year earnings target of $4.25 per share to $4.50 per share, up 5 to 11 percent from 2011.

The U.S. Defense Department’s aims to cut spending by $487 billion over the next decade by eliminating 100,000 ground troops as it winds down from major operations in Afghanistan and Iraq and aims for a smaller, more mobile force.

Red Lobster parent Darden profit drops, partly due to hurricane Irene

ORLANDO, Fla. ― Darden Restaurants Inc. posted a 6 percent drop in quarterly earnings, partly hurt by the hurricane Irene, but reaffirmed its full-year earnings outlook.

The company said Irene hurt sales at established Red Lobster, Olive Garden and LongHorn Steakhouse restaurants and estimated the storm reduced quarterly earnings by about 2 cents per share.

Orlando, Florida-based Darden earned $106.8 million for the first quarter, or 78 cents from continuing operations.

Sales were $1.94 billion, up about 7.5 percent.

Darden also said it sees full-year earnings per share growth from continuing operations toward the lower end of its previously announced range of 12 to 15 percent.

Shares of the company closed at $46.98 Tuesday on the New York Stock Exchange.