General Mills Inc reported quarterly profit above Wall Street estimates on Wednesday, as the Cheerios cereal maker raised prices and eked out higher margins from cost savings. General Mills shares, which have fallen about 38 percent since the start of the year, were up 4.8 percent before the bell. Adjusted gross margin was 34.5 percent for the second quarter ended November 25, beating the average estimate of 33.76 percent, according to IBES data from Refinitiv.
Several consumer goods companies, emboldened by a strong US economy, have raised prices this year to make up for rising commodities and transportation costs. Chief Executive Officer Jeff Harmening said the company hoped to maintain the same cost discipline in the second half of the year, and grow sales.
General Mills, which also makes Yoplait yogurts and Nature Valley granola bars, earned 85 cents per share excluding items, 4 cents above the average analyst estimate. Net sales rose 5 percent to $4.41 billion, but missed 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.
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