Cereal maker General Mills has reported a sharp rise in earnings for the first quarter ended 28 August.

 

Net sales for the 13 weeks ended 28 August 2005, increased 3 percent to $2.66bn over the same period a year ago, as unit volume grew 1% worldwide. 

 

Earnings after tax totalled $252m, up from $183m last year. 

 

"Our year is off to a strong start," said chairman and CEO Steve Sanger. "We are achieving our planned price realization and margin growth across all three of our operating segments."

 

Net sales for General Mills' domestic retail operations grew 2% to $1.80bn for the quarter, reflecting net price realization and favourable mix of sales.  Volume matched strong year-ago levels, that were up 4%.  Operating profits increased 15% to $406m, reflecting favourable production mix and productivity.

 

Yoplait led net sales growth, with a 19% increase driven by Yoplait Light, and new items including Chocolate Whips and Yoplait and Go-Gurt Smoothies.  Meals division net sales grew 4% led by Progresso soup and Green Giant frozen vegetables.  Snacks net sales grew 3%, with good performance by the Nature Valley and Chex Mix businesses.  Pillsbury USA net sales finished down 1% compared with 9% growth in the first quarter of last year.  Baking Products net sales matched last year's first-quarter results, which were up double-digits from fiscal 2004.  Big G cereal sales also matched prior-year results, as a 6% volume decline was offset by good price realization.  The first-quarter launch of seven new cereal items, including three new varieties of Total cereal and two flavours of Yogurt Burst Cheerios, is expected to contribute to renewed sales growth for Big G in the remainder of the year.

 

Total consumer purchases of the company's products also grew in the quarter, as composite retail sales for major product lines were up 1%.

 

Net sales for General Mills' consolidated international businesses grew 11%t to $446m.  Unit volume increased 7%, and foreign exchange contributed 3 points of growth.  Operating profits grew to $61m, up from $36m last year, as the result of sales growth and margin improvement driven by productivity.

 

First quarter net sales for the company's Bakeries and Foodservice segment totalled $417m compared to $421m a year earlier.  Operating profits reached $33m, up from $23m in last year's first quarter as favourable product mix and operating efficiencies offset a 3% volume decline.