UPDATE: General Mills Posts Downbeat FQ4 Profit, Shares Drop

Shares of General Mills

fell more than 3% in pre-market trading after the company reported a weaker-than-expected fiscal fourth-quarter profit. General Mills' quarterly profit surged to $404.6 million, or $0.65 per share, versus a year-ago profit of $366.3 million, or $0.55 per share. Its adjusted earnings climbed to $0.67 from $0.54 per share. Its net sales dropped 2.9% to $4.28 billion from $4.41 billion. However, analysts were projecting earnings of $0.72 per share on sales of $4.42 billion. General Mills' sales in the US retail business dropped 1% to $2.4 billion, while international segment net sales declined 7% to $1.3 billion. Convenience Stores and Foodservice net sales gained 1% to $508 million. General Mills Chairman and Chief Executive Officer Ken Powell said, "Our plans for 2014 called for sales and earnings growth consistent with our long-term business model, along with increased cash returns to shareholders. We made good progress building our worldwide food businesses, and we returned more than $2.7 billion in cash to shareholders through a 17 percent dividend increase and significant share repurchase activity. But our sales and operating profit results were disappointing. In the fourth quarter, promotional spending in developed markets was less effective than we planned and input cost inflation was a bit above our forecast. Net sales and adjusted gross margin fell short of our targets." General Mills expects FY15 net sales to rise at a mid single-digit rate in constant currency and it projects adjusted diluted EPS to increase at a high single digit rate in constant currency. Powell added, “Our Number One objective in the new fiscal year is to accelerate our topline growth.” General Mills shares fell 3.17% to $52.00 in pre-market trading.